New math: personal connections in an era of infinite data

InsightaaS synopsis: "1+1=3: CMO & CIO collaboration best practices that drive growth," a Canadian Marketing Association whitepaper sponsored by IBM Canada and prepared by the Conference Board of Canada, makes the case that alignment of IT and marketing is critical to future competitiveness — and offers some insight into how this can be achieved.

 

There is no doubt that we live an in increasingly digital-centric world. Indeed, InsightaaS is firm in its belief that the future belongs to "SoLoMoN" — social, location-based, mobile and networked systems that will amalgamate Big Data, gamification, consumerization and other key IT issues into massive cloud-based systems that will transform the way that public and private-sector organizations operate. But if one accepts our SoLoMoN presence, a second questions quickly emerges: what does management need to do to prepare for this digital future?

In "1+1=3: CMO & CIO collaboration best practices that drive growth," this explosion of user-generated data is taken as a point of departure for a discussion of how collaboration between CIOs and CMOs is essential to corporate success. CIOs, the paper’s authors argue, are largely focused on office system deployment and management, while CMOs are judged by their activities to define market positions and segments, and to manage perceptions associated with the corporate brand. However, in an environment where customers themselves generate data, and where they interact directly and in identifiable ways with corporate sales and marketing activities, there is a need to combine these solitudes of understanding into a single, technology-informed view of customers, and to use this understanding to trigger system-supported communications to individuals, segments and the market as a whole. As the report notes, "For the first time, the entire relationship between a customer and an organization is likely to be intermediated through technology. This goes from initial awareness of a company’s product to the purchase and post-sales service…as the [customer] relationship is digital (and for some companies only digital) the relationship between marketing and information technology is becoming more crucial."

Use of the word "relationship" in this phrase is deliberate, as it suggests the involvement of two parties. A key issue exposed by the research, though, is that at present the dialogue is asymmetrical. Canadian consumer adoption and usage of online marketing is roughly on par with U.S. and global norms. However, Canadian organizations have been slow to embrace the opportunities that result: the whitepaper quotes Conference Board statistics showing that Canadian industry ranks 14th in marketing sophistication and 23rd in process sophistication; the report notes that "It would seem that Canadian organizations lag Canadians in their embrace of leading technologies and practices."

The authors goes on to observe that "Canadian companies that master the digital economy can avoid the fate of slow growth or decline." This mastery, the report holds, is largely contingent on the ability of CMOs to effectively leverage technology, and of CIOs to support marketing. In some ways, this means catching up to concerns logged in other countries; for example, a 2011 survey of U.S.-based CIOs identified their four most prominent challenges as being "data explosion," "social media," "growth of channel and device choices," "shifting consumer demographics."

Necessity and guidance

The whitepaper revolves around the challenge inherent in bridging the gap between a recognition of the need for change — "Both CIOs and CMOs understand that this new world has strategic implications for their organization" — and a recognition that while there is a need for "a better and more strategic working relationship between CIOs and CMOs," the "working relationship exists in an organizational context" that is not, at least by design, structured to support close collaboration between the two functions.

Using this as a starting point, the report outlines some of the factors that need to be considered as organizations align marketing and IT to engage effectively in the digital economy. The whitepaper highlights the distinction between established and new organizations, noting that in start-ups — especially those in B2C — "digital marketing is part of [the] DNA," while organizations that are older, in B2B, in industries subject to regulation of information, and/or those with large investments in legacy systems face complexities in migrating to a digital-first strategy. The authors of the whitepaper note that the migration itself is not optional, as "marketing models are rapidly shifting from paid media to earn and own media…fundamentally changing the way marketing is conducting." The complexities faced by established organizations, B2B firms, those in regulated industries, etc., require that they "take a different approach to digital marketing" than B2C start-ups — but the emerging market realities require that the journey to digital marketing be taken, even if the path itself is different.

The report serves its overall purpose best when it comments on the strategic context for CIO/CMO collaboration. It notes that "When the strategic goals are clearly defined by customer knowledge and engagement, then there is greater probability that marketing and information technology sub-strategies are aligned… marketing strategies, IT strategies, digital strategies and analytic strategies…need to be aligned regardless of where they sit in the organization’s structure.

Netting it out: InsightaaS perspective

In some places, this report repeats observations and guidance that have been around since the 1990s: "information is power," "it is harder to get and retain customers than ever before because the customer’s search and switching costs are lower than ever," "Customer expectations around value, price, quality and ease of doing business are higher than ever." It adds more contemporary references — for example, around Big Data and the value of collecting huge volumes of data from multiple sources, in real time.

There is certainly some merit to reinforcing these truisms and to highlighting the continuous expansion of online activity, and especially, of online marketing and related information. Of course, while massive increases in the amount of information available for analysis may increase the potential for new breakthroughs in understanding, it does not guarantee that any new insights will arise, nor that any new actions will be taken. The sheer magnitude of data challenges even the fastest systems to extract any meaning from the trillions of bits that they have available; and marketing staff, particularly those schooled in traditional (and limited) ways of looking at markets and buyers, may treat much of the "new news" as simply noise.

Most IT industry observers believe that the first issue can be satisfactorily addressed — for example, through use of Hadoop or other management/analytics systems geared for Big Data. The second issue will likely prove more pernicious: many current marketing professionals may well feel threatened if new data sources and analytical techniques give rise to assumptions and practices that challenge the ‘business as usual’ techniques that they have used successfully in years past. And the issue of C-level collaboration between CMOs and CIOs, which is the primary focus of the research, is clearly a complicating factor. The two corporate functions are hardly natural allies, and in truth, many members of each group probably harbour some disdain for the other. They have not tended to be close allies in the past, and may not function smoothly together in the future. The whitepaper describes them as sharing "a common view," since "over 90 per cent of CMOs and CIOs who responded to one survey agreed that technology is "totally critical" for the future success of the organization," but it’s probable that in many specific cases, the CMOs and CIOs will disagree about what that means to technology deployment strategies — and to internal ownership of these strategies.

In the end, though, critiques of specific items within the text misses the broader point: that technology is becoming the primary interface between organizations and their customers and prospects. This will have the effect of aligning the marketing and IT functions; both will need to support communications and engagement with customers, and both will be necessary to extracting information from these interactions and using it to inform (and execute on) corporate strategy. In the not-too-far-off-future, collaboration between CIOs and CMOs becomes not a matter of preferences and terms and ‘turf’, but rather, a recognition that marketing and IT cannot continue to exist as two solitudes, or even two sides of a coin — they are both a part of the same aspect of a single go-to-market currency that is becoming the ‘ante’ to market participation.

To download a copy of the "1+1=3: CMO & CIO collaboration best practices that drive growth" report’s executive summary, please click here.

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