by Sarah K. White

Forrester calls for CIOs and CMOs to improve their relationship

May 10, 2016
CIOCMOIT Leadership

A new report looks at the relationship between CIOs and CMOs, citing that a big shift needs to take place if businesses ever hope to live up to increasing customer expectations.rn

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Credit: Thinkstock

Not long ago, CIOs and CMOs didn’t have much to talk about. The former was traditionally more focused on the technological infrastructure of the corporation, while the latter focused on the customer experience and brand image. Marketing technology has changed all of that.

Forrester released a report that looks at the partnerships between CIOs and CMOs, and how the relationship is becoming vital to businesses. Researchers at Forrester interviewed companies such as Intel Security, IBM, Equifax and PR Newswire, among others, and they also surveyed 14,596 business and technology-decision makers.

“The digital revolution has forever changed the balance of power between organizations and their customers, putting customers more in charge. Whether in B2C or B2B industries, empowered customers have an unprecedented ability to make rapid decisions, weigh and review products with peers, and provide feedback in social channels anywhere in the world. Brand value is now tied to product experiences and the outcomes they deliver,” according to the Forrester report.

Customer is king

“The customer is king,” is no longer just a slogan for retail — it’s become the rallying cry for nearly every industry. Forrester found that, out of all the businesses polled, 72 percent cited improving the customer experience as a top priority in the next 12 months. It also found that 70 percent said they are focused on improving products and services in the next 12 months, while 63 also want to “address rising customer expectations.” Those three categories, all focused on the customer, came in as priorities over reducing costs and improving company innovation.

“Customers now have all the tools to make decisions literally at their fingertips at any moment. This power is changing the way organizations approach a customer. They really must know them in order to provide the right information at the right time,” says Chris Chodnicki, co-founder and executive director of Strategic Partnerships at R2Integrated, a company focused on brand development and building customer satisfaction. Customers now have the opportunity to speak out about their experiences with any brand, thanks to the advent of social media. And it has forced companies to respond, as customers now hold brands to a higher standard, Chodnicki says.

For Sheryl Pattek, vice president, executive CMO partner at Forrester, says the most important communication that needs to happen between CMOs and CIOs is around creating realistically attainable plans to improve the customer experience through the entire customer life cycle. That way, both parties know what they’re getting into and what the expectations will be, so there aren’t surprises along the way. “When approached in this manner, the marketers focus on the value they bring to the table, [which is] customer engagement priorities and desires,” she says. While on the other side, “technology management [will] focus on the value they bring to the table,” which she says is, “understand technology capabilities and potential vendors.”

Pattek also points to the ubiquity of data as a motivator for improving the customer experience, especially as data now drives marketing and IT decisions in the enterprise. The only problem is that while marketing is tasked with effectively using the data or interpreting it to build the brand, IT is the one who manages and houses all of the data, which forces the two teams to work together.

“Making sense of the data tsunami is one of the toughest nuts for marketers to crack. It’s time for CMOs to wake up and face the music. This is not a challenge they can solve on their own. They need the knowledge and expertise of the CIO partner on how best to bring together all of these data sources into a single system that can drive insights. Without this, marketers remain stuck with data for data sake without the insights they need to spur business growth,” Pattek says.

[ Related story: Demand for data driven marketers will drive CMO turnover, IDC predicts ]

Out with the old, in with the new

Just as IT is experiencing a remodeling, marketing departments have found themselves in a unique position as well. More than ever before, technology has become a major aspect of marketing, whether it’s through social media, hardware or software, customer portals, company websites and even marketing email blasts. The bottom line is that marketing is experiencing a tech boom just the way IT is.

“Since customer experiences are underpinned by technology — either in support of employees or directly with the customer – a healthy relationship is critical. If the relationship isn’t strong today the best first steps begin with understanding both leaders want the same thing – revenue growth and delighted customers who will advocate for the brand,” Nigel Fenwick, vice president and principal analyst at Forrester, who co-authored the report.

And it’s not easy — marketing and IT are two very different departments, so finding a common ground might not be easy for many companies. “No matter what organization you belong to, different departments are going to have varying sets of priorities and business requirements which can often cause siloes to form and decelerate efficiencies,” says Chodnicki.

One way he suggests avoiding this type of “siloed culture” is to keep the department heads in mind when choosing technology. In fact, he suggests forming a committee of “diverse internal stakeholders,” including the CIO, CMO, COO, head of HR and director of finance, just to name a few. Together, these executive leads can communicate what their department needs in terms of technology in order to find the best platforms and solutions that suit everyone in the company best. He says that creating these unified goals helps to not only speed up the deployment of new technology, but also causes less contention down the road because every department will have a say early on in developing new technology initiatives.

[ Related story: Meet tech’s new odd couple: the CIO and CMO ]

IT needs to move faster

As Forrester points out in the study, “customer expectations wait for no one,” and businesses need to move quickly. But the stereotype of IT is that it’s slow to change, focused on maintaining internal technology and hesitant to adopt new technology. This slow paced attitude is typical for very good reasons — as IT is generally motivated by security concerns and cost. However, Forrester calls for a change, citing that “slow and complex tech management must now become fast and simple.” However, that’s easier said than done.

Part of this change means shifting from an “inside-out focus,” as Forrester dubs it; CIOs need to focus less on using technology to reduce operational costs and shift to “creating world-class experiences for customers that increase perceived customer value.” In the study, Forrester gives examples of two CIOs who were able to free up resources to improve the customer experience. The first is Clay Johnson, global CIO of GE Power and Water, who managed — through educating the board and executives — to release $19 million to consolidate legacy systems and move towards a cloud based system instead. The other example is Hubert Wackerle, CEO of ITSV, who worked tirelessly to create a customer-centric attitude at his business, by asking his tech management teams to put themselves in the customer’s shoes, and consider what would frustrate them or what they would want out of a service to give them the right perspective.

Creating a faster, more fluid IT department might also mean redefining the metrics against which IT and marketing are measured and compared. “Metrics can act as an anchor slowing down progress if everyone isn’t measured using customer impact and revenue metrics. By making sure the tech team and the marketing team are measured alike, the CIO and CMO send a powerful message to their teams that in fact they are on the same team,” Fenwick says.

CIOs and CMOs need to find common ground

In the corporate world, approval often boils down to establishing the ROI on a new initiative — and that’s true with new technology as well. CIOs and CMOs will find themselves in a unique position, according to Forrester, forcing them to work together to help educate the CEO about what needs to be done to invest in progress. Forrester says that CEOs need to have an “ah-hah” moment about the customer experience, and the leaders who can bring that on best are the CIO and CMO — as long as they are working together, rather than competing.

For Pattek, part of defining the ROI is encouraging CIOs and CMOs to see that they both have a common goal — keeping the customers happy. “When teams have shared metrics, they all work together toward a common goal. I see organizations putting shared customer experience metrics in place that both marketing and tech management are held accountable,” she says. If both departments can understand they have similar desired end goals, it will help them realize the significance of educating the board and CEO about the importance of business technology.

Forrester asked businesses which departments were in charge of specific tech-related responsibilities in the company and the results revealed that, while there are different priorities are for IT and marketing, there is also a lot of overlap. When it comes to customer experience strategy, 47 percent responded marketing was in charge; 50 percent said marketing is in charge of digital media selection, 54 percent said marketing is in charge of social media CRM and 75 percent said marketing is in charge of social media marketing. For 23 percent of companies, IT is in charge of employee digital engagement, while 34 percent have IT in charge of vendor selection and 37 percent say IT is the leader of customer mobile app development.

Some of the most interesting stats Forrester uncovered were around web design and web strategy, where 40 and 46 percent of businesses state marketing is in charge of these aspects, respectively. Alternatively, 28 percent of businesses put IT in charge of web design, and 21 percent have IT leading web strategy at their company. And 17 percent of businesses have marketing in charge of vendor selection and customer mobile app development — two areas that are typically considered to be IT focused. What the data suggests, is that for two departments that are seen as very different, there is still quite a bit of overlap on what businesses expect marketing and IT to handle.

[ Related story: Taco Bell CMO on digital marketing’s 7 paradoxes ]

The six levers of the customer-obsessed operating model

So what does Forrester suggest for businesses stuck in limbo between marketing and IT? The study presents a model called the “six levers of the customer-obsessed operating model,” which addresses six key areas in bridging the gap between CIOs and CMOs. The “levers” include structure, culture, talent, metrics, process and technology, which come together to create a balanced focus for the customer. These focus on the organizational structure, establishing cultural values in the company, improving hiring and retention efforts, using metrics to define progress, considering how people actually work day-to-day and what the technological systems are that keep the business running.

According to the study, businesses need to reconsider the skills they look for in new IT and marketing hires, by focusing on building collaborative teams that are dedicated to the customer, establishing customer value, regularly adjusting and refining what customer satisfaction means and considering creativity as something different from actual output, so creative employees can thrive and foster innovation.

For Fenwick, fostering the relationship between CIO and CMO is one that will quickly become mutually beneficial. “It’s hard to make progress on customer experience without truly understanding your customer. Bringing a company’s customer data together is something marketing needs to work with [IT] to achieve. Marketing also needs to work on building trust within the CIO’s team by bringing them into discussions around CX early. In leading companies, it’s often the tech guys who will spot a problem in [user] experience design early because they understand what will work at scale.”