It's old news. We watched indifferently years ago as outsourcers took over travel and entertainment at companies of any size. Need a hotel or a plane? Log in to Concur.
For managing prospects and accounts, SAP, Oracle and other ERP-based modules still own most of the biggest CRM accounts, but observers will tell you the momentum is with Salesforce.com.
Human resources? SAP, once the stodgiest old-line vendor there was just spent $3.4 billion on SuccessFactors for cloud-based talent management.
We've had a long history of departmental initiatives driving IT change, particularly IT outsourcing, but in the new cloud and service era, the cost and growth opportunities are enticing more than ever. Now, according to Gartner analyst Laura McLellan, the next and biggest fiefdom to claim IT ownership is marketing, and she predicts that by 2017 chief marketing officers will spend more on IT than their counterpart CIOs.
This isn't an outrageous prognostication when you consider, as most observers do, that marketing is the new de facto growth mechanism for many companies. Some well-known product companies (Cisco Systems for example) don't really manufacture their own products or sell directly at all. Their domain is making sure their brand meets its market.
Using their own studies and data from Duke University, Gartner says 2011 B2B and B2C marketing budgets as a percentage of revenue were almost three times as high (10 percent) as IT budgets (3.6 percent). In terms of 2012 growth, IT budgets grow 4.7 percent, all marketing 9 percent, high tech marketing 11 percent.
So, McLellan says, it's no surprise that marketing is increasingly going to control tech spending and do its own thing. The questions for her are how much will be done independent of IT, how ready marketing is to take the reins and how fast the shift will occur.
Many marketing organizations, she finds, have fully adopted basic and database marketing technologies and are now moving into customer analytics, mobile marketing and online e-stores, some of which are likely to be service provided. Whether the CIO plays a strategic or more of a back-office and transactional role is yet to be seen and depends on the business and culture.
But marketing is already a major buyer and influencer of technology, and has moved from a promotional to a growth role as a strategy owner.
Does a CMO have the expertise to drive tech with the background and architectural understanding of the CIO? Not by definition (and not the ones I know for that matter). It would be foolish to presume most or many marketing organizations are nearly ready to take over the scope of what's involved in buying and owning technology as it exists today. McLellan's presentation was meant for vendors, and this is definitely a "keep it simple, stupid," market, she said, (which is often marketing's goal anyway).
In regulated industries (e.g. health care, insurance) it's already clear who owns the technology spending reins. But there is a new frontier for demand as well. Marketers (like advertisers and everyone else these days) prefer to pay for results -- not products and services. Lack of synergy and hostility between marketing and IT can be an early indicator of the way things will swing.
Buyers, McLellan says, need to consider organizational structure, whether there is a single person overseeing all marketing technology (or a CTO); what the sourcing capabilities of the organization are; unconnected versus integrated systems and service versus captive technology investments.
Owning capital and maintenance budgets for technology in marketing or elsewhere may be a new thing. But as automation services emerge and improve, you can bet internal non-IT organizations will want sign-off and control of their primary working tools and over time you can expect they'll get just that.
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