Many organisations are undergoing digital transformation today, and it has serious implications for the bottom line. In a recent survey on digitisation conducted by management consulting firm McKinsey & Co, more than three quarters of executives say the strategic intent behind their digital programs is either to build competitive advantage in an existing business or to create new business and tap new profit pools. But according to a report by Accenture Interactive and Forrester Consulting released late last year, only five per cent of companies surveyed have been able to make digital a competitive differentiator. Digital transformation requires leadership that can align departmental stakeholders behind a clear vision. Typically, this would be something the CIO would take on, but marketing’s newfound reliance on data and analytics has put the CMO in the picture. A ‘grey zone’ now exists between the IT and marketing functions, so who should own the digital transformation process? The CIO, the CMO, or both?
Altimeter Group defines digital transformation as “The realignment of, or new investment in, technology and business models to more effectively engage digital customers at every touch point in the customer experience lifecycle". Two words are key here: ‘technology’ – the realm of the CIO – and ‘customer’ – the realm of the CMO. Digital ownership now sits between the IT and marketing functions. As a result, two departments that have previously had very little to do with each other are both being asked to spearhead change to transition their organisations from traditional models into digital-first, customer-centric businesses.
For and against
Many believe the CIO should control the entire digital transformation process. In the aforementioned Forrester report, participants were asked who they believe should own the organisation’s digital vision and strategy. 30 per cent of respondents think the CIO is the right one for the job, followed by the CEO with 27 per cent, the CDO (Chief Digital Officer) with 17 per cent, and lastly the CMO with just 8 per cent.
On the other hand, some believe that the CMO should drive digital transformation requirements. An article in – ironically – CIO Magazine argues the case for the marketing executive, explaining that since the core objectives include better engagement with digital customers (which in turn translates to higher revenue and increased profits) it is the CMO who should define the digital transformation requirements. It states, “Even though the CMO may not know the technical complexities involved, he or she can identify shortcomings in existing processes and request IT solutions to fix them. In this way, IT comes up with a solution that works for the business, and indicates how much it will cost”.
Whoever the official leader is, the marketing and IT departments need to work together if digital transformation is to be successful. A recent Information Age article explains that a lack of CMO-CIO alignment is threatening to stagnate digital transformation in many organisations, as the overlapping of responsibilities causes internal friction. But while some may see this overlap as a conflict, the shifting responsibilities of the CMO and CIO organisations in fact present the opportunity for a very powerful partnership. The CMO’s customer data and creative vision combined with the CIO’s expertise in development and IT architecture enables organisations to have two champions swapping insights to solve for the complexities surrounding marketing automation, big data analytics, and cloud, mobile and social technologies.
However, while technology is integral to digital transformation, business strategy, operational processes and metrics all need to line up as well to make the process successful. That means the leader – or leaders – who set the vision and strategy must have a strong handle on not only technology but the other elements as well. The two executives’ joint endeavour needs to be about delivering on the data-driven marketing, IT and business goals of their organisations. This requires the CIO to develop the skills, relationships and credibility to participate in business conversations, while the CMO needs to take a wider view of strategy, process and business model issues that affect the organisation as a whole.
Room for two
For digital to have a transformative impact on the business, it requires strong leadership. Instead of fighting over who owns what, the CIO and CMO should work together to bring about change. Ultimately, it doesn’t matter who’s in charge as long as the two department heads agree on the direction and scope of digital initiatives, and how they support the business strategy.