by Patrick Moorhead

How Shadow IT gives CMOs more power

Apr 06, 20156 mins

IT power has shifted between groups for decades. The latest waves of technology and solutions are increasingly adding to the CMO's IT power.

I’ve been in and around IT for 25 years, and “IT power” has always shifted between the CIO, end users, and department leads. CIOs initiated the mainframe, department leads drove minis, PCs and the web, and end users drove mobility via the bring your own device (BYOD) movement. In recent years, the turf wars between Marketing and IT have been growing stronger than ever, mostly because of the growing concern over CMOs encroaching into areas controlled by CIOs. As businesses became more and more digital, it was easy to predict that this would happen. 

It’s true that businesses have always been attracted to technologies that claim to make work faster and easier, and CIOs got hired to stay on top of those and aid in technology decisions. But today, as with everything else in the corporate space, there’s a growing need for technology to be more agile. When there’s a need, the technology solution to meet that need has to be readily available. Businesses don’t have time for drawn out processes. So when it comes to technology, marketing execs and leaders are increasingly taking matters into their own hands, sidestepping the CIO. This shouldn’t come as a surprise as it has happened many times in history.

“Shadow IT” – pulling IT out of the IT group

The term “Shadow IT” is being thrown around in many discussions related to the CIO-CMO relationship. While the term has been frequently used by IT personnel to define the use of IT systems or solutions that were not devised within the walls of the IT department, Shadow IT is now being perceived as an important step in innovation. The belief that Shadow IT is opening new channels of development for businesses is bringing it to the forefront. Employees want to use devices and applications that they are comfortable with, and with many companies adopting BYOD policies, it makes sense that many of them are using programs that have not been officially approved by the CIO and IT department. Some examples I regularly hear of are file sharing applications like Dropbox or project management tools like Basecamp or Asana.

Shadow IT is heavily supported by the growing consumerization of IT, which has turned the tide for businesses by giving them the power to use the latest technology immediately, without having to pay a hefty price for it. When it’s easier and more cost-effective to buy an application for a few thousand dollars and have it immediately available, many would not choose to invest in an expensive system. Yet, the CIO might often disagree as they weigh the risks of security and “clean up” against the value of fast cost savings and productivity.

The CMO, on the other hand, is thinking outside the box of CRM and ERP, and is excitedly testing new tech ideas and solutions to manage marketing’s top three challenges: growing profitable revenue; connecting with customers; and tackling serious competition. Currently, a large percentage of company budgets include expenses for infrastructure and software.

Are CIOs losing light of technology for business’s sake?

A growing number of employees are not finding organization-approved IT tools particularly helpful, and it’s definitely the case when they have other applications that they are already familiar with at their disposal. Their desire to stick to what they know will work for them has resulted in the rise of Shadow IT.

Many CIOs tend to overlook employee productivity, performance, and business outcomes while trying to keep an organization’s IT practices tightly bridled. In the process, they are missing the bigger picture and failing to realize that technology is not for technology’s sake, but rather it is for business’s sake.

In this case, CMOs emerge better equipped with knowledge and understanding of business returns. While CMOs have their hands dipped in some of the key strategic business operations, including customer relationships, they become one of the front-runners in driving new tech trends as they seek out programs that help their teams do their jobs more effectively.

Technology should drive productivity in tech-centered employees

Today’s tech-driven employees enjoy using apps and tools in their personal lives, and they demand the same level of ease and efficiency from the tools they use at work. Today’s marketers, for example, are usually pretty well versed in technology applications, as they connect to their customers via social outlets and blogs, conduct team meetings and connect remotely with the help of video conferencing, and as they funnel and analyze Big Data that helps them do their job better. This may be one of the biggest reasons why personal mobile devices are becoming internal and external priorities among enterprises that have adopted the BYOD culture.

Research shows employees tend to perform better when they use devices they are comfortable with. Businesses are turning to BYOD for two reasons: first, to help employees stay productive without having to switch between devices at home and office; and second, to tackle enterprise mobility. In terms of BYOD, there remains a massive disconnect in attitudes between the CMO and the CIO. While CIOs are going ballistic over the security concerns of BYOD, CMOs are busy counting the ROI from the improved productivity.

Is power slipping into the hands of the CMO?

It’s not hard to see why CMOs are being branded as the champions of enterprise tech transformations. Last year, it was predicted by some that CMOs will manage nearly 10 percent of the total tech budget by the end of 2015. Moreover, CMOs are perceived as the closest to having CEO potential, perhaps due to the fact that their responsibilities involve a deeper understanding of the customer. As customer-centricity is becoming the heart and soul of business strategy, CMOs are being looked upon as the most logical successors to the CEO. So, yes, the power is falling into the hands of the CMO.

At the same time, CMOs need to enhance their tech literacy in order to fully understand the ramifications of their tech decisions. A better scenario may be one where the CMO partners with the CIO. The main aim of both IT and marketing is to improve business outputs and to add to the bottom line of the organization. The aim can be fully achieved when both the positions blend together.

(Note: Daniel Newman, adjunct professor at North Central College School of Business and Economics, contributed to this article.)