As information management assumes an ever-greater role in the modern corporation thanks to the cloud and Big Data analytics, the task of handling that role by default is increasingly falling upon the Chief Marketing Officer.
But is the CMO the right person for the job?
In my last column I talked about the growing trend across several of today’s organizations. While information continues to grow in importance within the enterprise, for some IT departments and Chief Information Officers, energy and resources are being devoted to managing the organization’s infrastructure, such as employee laptops, email, and applications support. I believe that managing the deluge of data that we are all facing today is top of mind for most executives within the C-Suite. The question remains: who should manage the data?
While the bunker mentality may benefit the CIO and the IT department – at least in the short term, it’ll be disastrous in the long run – it doesn’t solve the bigger information challenge facing the enterprise. The challenge of managing and making the best use of the ever-taller mountains of valuable market and customer data are not going away. Some operation in the organization needs to tackle this challenge, and one likely candidate, because it needs that information first, is the marketing department.
Unfortunately, one of the most important lessons in business management is that if a duty falls upon a group by default, it is probably not the right group for that job. And for all of the celebration (and relief) these days over marketing’s take-over of corporate information management, there are good reasons to believe that this will prove to be a failure, an expensive distraction, and eventually an albatross around the neck of the CMO.
To understand why we need to look at a little history.
The office of Chief Marketing Officer is a relatively new one. The title didn’t even appear on most corporate organization charts until the 1990s. Before that marketing was part of a continuum with sales, PR and advertising, and senior marketing responsibilities were typically shared between the directors of those departments. Even as late as 2005, surveys showed that CMOs were rarely given a status on executive committees equal to other C-Level positions.
But the same forces that led to the creation of the CMO and the marketing department – the Internet and its power to gather vast quantities of useful data on customer habits, desires and demand – also relentlessly drove marketing into a central role in the modern corporation.
This technological revolution proved a godsend to most companies but especially to consumer enterprises with vast global presence. Before, there was no economically feasible way to achieve the kind of personalized selling these companies needed to stay competitive; so they were reduced to mass advertising, and broadcasting their sales messages without developing a relationship with their customers.
The Internet and social networks changed all of that. Now instead of talking to 25 top customers and shot-gunning unfocused messages to the rest, companies could gather precise data on millions of customers – and modify a personalized marketing message to each one of them. Better yet, it was a virtuous cycle: each transaction gathered that much more data on individual customers. . . and allowed the messaging to be even more refined and relevant.
This has proven to be a powerful competitive tool – and has transformed the modern economy. And while the management of this information might seem the natural preserve of the IT Department, many corporate information professionals didn’t see it the same way. To their mind, their duty was to the internal data management of the company, to keeping the company’s information infrastructure robust and healthy – not to dealing with these giant caches of evanescent and mostly external data. Hence IT’s reluctance to accept this responsibility.
Meanwhile, marketing departments, faced with this reaction from IT, have had no choice but to take on the job of customer/market information management. The cost of not having and exploiting this data is just too high. Indeed, knowing how vitally important this data is, many have taken it on with relish, building their own tech empires.
All of this may sound reasonable, even inevitable but for one big problem: information management is its own discipline; it is not a core competency of marketing departments. As much as they want that data and the insights within, running an IT operation is not only a distraction for marketing, it is also outside its proper purview.
One true thing about IT departments: installing and operating data centers is their actual job. It’s not marketing’s true job – which is why, even though it may assume control over this market and customer data, it has very little experience, incentive or real desire to build up its own internal IT infrastructure. Rather, the typical solution of these marketing departments is to go out and contract this data acquisition, storage and analysis.
But that strategy brings its own set of problems. For one thing, it is expensive. Without owning the information infrastructure, marketing doesn’t enjoy the economies of scale of internal operations. By ‘renting’ this service it also never develops the expertise it needs to take full advantage of the technology.
But the biggest problem of all in handing over data management to the marketing department and the CMO is that this activity should be a core asset of the modern corporation – while instead it is being reduced to a side activity of the marketing department. That is not a recipe for long-term success.
It will work for a while, not least because marketing needs it to work. But the most progressive information-driven consumer companies out there – Amazon, Netflix, Zappos, the Gap – are already moving on to the next evolutionary step in corporate data management: that of consolidating the many silos of this gathered information into a unified, integrated Cloud that offers the company a more comprehensive view of its customers and markets.
Unfortunately, even if they want this comprehensive approach, most marketing departments, have neither the expertise nor the budgets to take it. And because of that, they will soon begin to fall behind their competitors.
And what will those smarter competitors do to stay on the leading edge of data management? Well, just as this responsibility has migrated from the IT department and the CIO to marketing and the CMO, it is time for it to move again – with luck, for the last time – to where it is both given the recognition it deserves as the foundation of the modern enterprise and placed in the hands of an individual for whom its constant improvement is their sole responsibility.
Who is that person? That will be the subject of our next column.