Who’s pulling IT’s strings?

By Graeme Burton
07 May 2014 View Comments
String man

When Computing published “Meet IT’s new boss: The CMO” in March, it caused quite a stir.

While IT has been pitching itself since the 1990s as the engine room of the enterprise – looking on in approval as Phil Clarke at retail giant Tesco shimmied smoothly from IT director into the role of CEO – marketing is increasingly making a play as the real home of IT.

Further reading

After all, what is a company without sales? What are sales without marketing to help generate the leads? And how are sales leads generated these days without the involvement of IT, to a lesser or greater extent?

“From an IT point of view, for CXOs one of the main initiatives they are focusing on is implementing the technologies, processes and tools to better understand and synchronise with customers,” says Chris Nott, chief technology officer, big data and analytics, at IBM.

“That’s typically been a CMO responsibility. And we have seen CIOs increasingly involve themselves directly in what has traditionally been a CMO activity. The kinds of technology that sit behind that mean IT is becoming an increasingly important information source for marketing in areas such as providing a much more rounded view of individual customers,” he adds.

That means being able to reach wider external sources of information in order to build up that richer view. At the same time, though, such increasingly easy-to-use tools are putting more and more power into the hands of “marketeers”, he adds. “Without the involvement of IT, they can analyse activity, develop and run campaigns and so on. IT then comes back into the picture in terms of assisting and analysing the performance of that kind of activity, and advising on how they can improve the effectiveness.”

But the drive to better connect companies with their market, says Vivian Braun, retail and consumer products industry lead EMEA within IBM’s Information & Analytics Group, is increasingly coming from the CMO, not the CIO.

“Marketing are the ones that know that they need to improve their engagement with the market and with their customers. They are the ones that suffer from not having the right tools. So the initiative will very often come from the marketing side, driving the requirements that IT help them to meet,” says Braun.

A key shift, adds Braun, is the need not just to examine data in an integrated form from multiple disparate sources, but also to use analytic techniques to auto-discover real, actionable insights.

“It’s really about integrating the data to get that rich, full picture of patterns and trends when you look at customers and users anonymously and to get the 360-degree insight into individuals. It’s about getting all those touch-points together in one series of continuous analysis.”

The key technologies driving this battle between IT and marketing, says Nott, include better quality master data management, the use of various techniques to build structured data from largely unstructured sources, and predictive modelling and self-learning tools.

“For better quality master data management, there’s a couple of ‘implementation patterns’ you can adopt to achieve that to get a better idea of customers in particular,” says Nott. For building structured data out of unstructured information, he says, “if you are looking at weblog details or social media content, you can do some textual analytics in order to produce a structured form that you can use to enrich the view you have on your customers”.

Predictive modelling and associated self-learning tools, adds Braun, will automatically refresh and refine new data segmentations. “It’s about making life easier for the marketeers, giving them the data in a very concise format that is easy for them to make decisions on. But you don’t have PhDs faffing around with data models – all that should be inherent in a good software package,” says Braun.

Winning and losing

Given that it is much easier to lose customers than it is to attract them, using this new technology to combat “churn” ought to be a top priority. “Predictive analytics can identify lost customers and can identify factors that suggest that someone might defect to another organisation so you can try and retain them before it’s too late,” says Nott.

That evidence might be how they respond to a promotion through the analysis of multiple transactions and other engagements. For example, the system can learn that if someone has been contacted a certain number of times and they still don’t respond that may be a sign that they are about to defect – evidence based on past examples.

In addition, the systems can also build up patterns of behaviour for loyal customers. From that, suggests Braun, an organisation can aggregate and calculate costs (and benefits) of certain customer behaviours and take action accordingly. In other words, “big data” analysis techniques can ultimately put a price tag (or estimate) on different types of customer interactions and behaviours.

Companies such as Acxiom, Oracle-owned Eloqua and Bizo go a large part of the way to satisfying such demands. They can help to collect, analyse and parse customer and business information for their own clients, enabling them to better target advertising campaigns, score leads, and other key marketing activities.

“Companies have to do a much better job of getting messages in front of their sales prospects way before they ever raise their hands to tell the company, ‘I’m interested’. That requires data: you have to understand what that buyer is thinking, where in the buying process they are. Are they even a prospect?” says Bizo CEO Russell Glass.

“If they are [a prospect], it requires a multi-channel environment to get the information to that buyer in the right time, right place and with the right message to help them make the right buying decision.”

Ipso facto, organisations also need to proactively ascertain when once-loyal customers are becoming increasingly disgruntled, too, of course.

While many organisations manage to strike a balance between the competing demands of different departments, George F Colony, founder of analyst group Forrester Research, suggests that in many cases IT – and, hence, the CIO – need to do much more.

The reason why this shift is being driven by the CMO rather than the CIO is because they are the ones who are directly experiencing the shift in market power in favour of the customers, when they can check prices and companies’ reputations in an instant before making purchases – and will all too readily resort to social media if they are unhappy for any reason.

What CMOs are therefore demanding, in many cases, is the ability to use the same tools in order to better satisfy demanding customers, and to head-off unhappy customers before their complaint becomes a social media sensation, potentially even turning an unhappy customer into a happy customer.

“In the fight for customers, technology management must engender collaboration and alignment with marketing and business executives around the business technology agenda,” says Colony. The CIO needs to take charge of this shift as we move into “the age of the customer”, he adds.

What that requires, is the right mix of IT and business technology. The problem is, many CMO and other business departmental heads often don’t believe that IT is working with them. While 39 per cent of respondents in a 2012 Forrester poll of business “decision makers” agreed that their organisation’s IT function “collaborates with the business on business strategy and innovation”, one-third believed that their IT department is actually hindering “business success”.

That means that many CIOs will be going into battle with sales-focused CMOs from a position of weakness, rather than strength. And with cloud computing also offering the promise that IT departments – particularly obstructive ones – can be bypassed in favour of services purchased from departmental budgets, perhaps the CIO has never been more of an endangered species.
The CMO, on the other hand, has numbers in terms of cold, hard cash on his or her side.

“The CMO has more ability to drive shareholder value than any single person or organisation, including the CEO. As they realise that and start to move investments in their direction, you’re going to start to see this big push towards data, and marketers getting increasingly important budgets and more to spend,” says Glass.

Already, many marketers have moved in on the website front-end, he adds, and that is just the start. “This is going to play out over a decade,” concludes Glass.

@GraemeBurton

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