IT & Marketing: No longer frenemiesAugust 6, 2012: 4:20 PM ET
CIOs and CMOs can no longer afford to work on separate wavelengths. In fact, they may just form the new C-suite power team.
By Yuchun Lee, contributor
FORTUNE -- Most will agree the relationship between IT and Marketing needs improvement. The CIO's job is to make sure there is an infrastructure that is lasting and secure. The CMO's job is to be highly agile and react quickly to changing market and customer expectations. So it's common to see disconnect – and separate goals.
But the CMO and CIO can't afford to operate on separate stages any longer, and we can thank the consumer for that fact. Smarter, more empowered consumers using smart phones, tablets and cloud services pose new challenges for the C-suite. Social networks such as Facebook and LinkedIn are now the main resources for brand information vs. flyers and newspapers. The consumer knows a lot more today, and knows it a lot faster too.
CMOs are beginning to realize just how important technology is intertwined with their ability to execute in today's digitized marketplace. Technology is pervasive through all key areas of marketing including new channels such as digital, websites and social media. For instance, online sales via mobile devices alone are up 300 percent for 2011 as compared to 2010.
CIOs, on the other hand, are beginning to raise the bar and step into enterprise leadership roles in addition to running the IT department. Some are providing space for CMOs to quickly deploy new digital campaigns. Others are looking for ways to assist CMOs more effectively as marketing needs continue to evolve. There are already good examples of leading companies as diverse as ING in financial services and Papa Gino's franchise pizza chain already bringing IT to bear on marketing goals.
The prime area for partnership is Big Data, which requires the use of marketing analytics to get insights from the flood of information. IBM estimates 2.5 quintillion bytes of data are created every day from a variety of sources including posts to social media sites, digital pictures and videos, purchase transaction records, and cell phone GPS signals, to name a few.
Just as IBM's Watson uses analytics to sift through millions of documents in a matter of seconds to answer a question, CMOs can use analytics to cull through millions of tweets, texts and online comments to figure out the best way to reach each individual customer.
Armed with Big Data, companies can now shape everything from how brands interact with customers, to the products and services they offer, to the structure of the company itself. Companies have always tried to get to know their customers, but did so by profiling broad demographics such as "men-18-34" not as individuals. Today, marketers can actually predict the moment to engage with a customer with the right information or right suggestion in a personalized, authentic way so that marketing feels less intrusive and more like a welcomed service.
At Papa Gino's, a Boston-based pizza chain, IT and marketing are working together to use Big Data for competitive advantage. The company is using analytics to gain more visibility into its online customer loyalty program. Management can now take loyalty and other performance data culled from all marketing and promotions and compare it with pizza sales and frequency of transactions – then measure them against the company's performance goals. As a result, Papa Gino's can tailor its mobile commerce campaign more effectively to help increase both the average order price and ordering frequency. Previously, managers spent 80 percent of their time just gathering the data.
At ING, a leading bank in the Netherlands, the CIO and CMO teams jointly performed research on customers by analyzing 16 different human emotions such as surprise, joy, and contempt. The goal was to find out how these emotions affected branding and product acceptance. ING discovered that for routine banking such as making a cash withdrawal or payment, customers felt bored or safe. But when securing a loan or mortgage, more extreme emotions such as fear, hope and nervousness played a role. They changed their customer service operations accordingly. ING is moving from a culture where it solved problems from a technical standpoint to a culture where it solves problems from a customer's perspective. Who said banking was boring?
CIOs are experienced analysts who understand the full potential and implications of technology, while CMOs are growth- and market-driven brand experts with an external lens. But as marketing channels continue to evolve and grow ever more quickly, the partnership between the CMO and CIO is without question a logical step. Together, these two positions can help one another in the ultimate goal of understanding and serving the demanding and digitally adept customer and driving revenue growth.
Yuchun Lee is vice president, Enterprise Marketing Management (EMM), in the Industry Solutions division, IBM Software Group. EMM is comprised of Coremetrics and Unica technologies, providing the foundation for solutions to help companies automate, manage, and accelerate core business processes across marketing and demand generation.