Marketing and IT will need to work better together if they want to generate big revenue from big data.
Big data necessitates a “marriage of convenience” between CMOs and CIOs – both of whom are responsible for turning this new resource into profit, explain Matt Ariker, Martin Harrysson and Jesko Perrey, writing for McKinsey Insights.
According to the authors, data-driven companies are 5% more productive and 6% more profitable than other companies. And with big data and analytics costing marketers $50 billion a year, there is huge pressure to improve returns on investment.
Thanks to the digital revolution, CMOs and CIOs have started to see each other as “natural partners”, argue the authors. CMOs have a surfeit of data from which they need to extract meaningful insights. And CIOs have the expertise to develop the IT structures necessary to generate those insights.
But this codependency did not always exist. Historically, CMOs and CIOs have been at loggerheads, say Ariker, Harrysson and Perrey.
CMOs, in their role as brand stewards, have tended to be the ones pushing for big, creative campaigns to promote the company’s offerings.
CIOs, on the other hand, were traditionally in charge of improving processes and “keeping the lights on” – managing core systems, cybersecurity, user support and reducing costs, for instance.
Today’s CMOs need to understand how business opportunities can be derived from big data and they need to have the right skills to make use of those opportunities.
As well as innate creativity, marketers now need a passion for facts and figures. And, the authors claim, most importantly, “they must be able to define their vision with precision from the beginning of data analysis to the delivery of a solution to the front lines to the tracking of earnings impact”.
For today’s CIO, the IT landscape has also changed. IT departments are now expected to make money, rather than just facilitate productivity. CIOs are now business-revenue generators and they need to be able to use complex analytics to make business cases. As new technologies shift IT spending more and more towards the front office, tensions can arise between the two departments over budget authority and decision rights. Indeed, recent research shows that CMOs and CIOs each believe they are the natural leaders for big data projects.
In the new digital landscape, there is also increasing need for speed and agility. Friction comes when marketers require IT systems agile and adaptable enough to cope with the fast pace of change. This “need for speed” can be a huge shift for IT.
Technology can help alleviate these tensions. Big data analytics platforms can make sense of data wherever it is; cloud and open-source technologies allow pilot projects to be developed and rolled out quickly and new technologies permit unstructured and structured data to be combined within a single framework.
But technology is not enough, argue the authors. The CMO and CIO need to share the lead on big data projects and that means sharing accountability for generating revenue and improving performance.
What is needed is a practical approach to creating and sustaining an effective partnership between the two departments.
“When you’re looking for a needle in the haystack of big data, you really need to know what a needle looks like,” advise the authors.
Understanding exactly what you want to get out of advanced analytics requires an effective partnership between the CMO and CIO. Within this partnership, the CMO defines the goals and use cases (functional requirements) of any big data initiative, while the CIO looks at the feasibility and cost of these use cases, providing different options based on time, cost and priority.
Marketing and IT people speak different languages and this can lead to frustration when trying to develop use cases or establish governance frameworks.
Both sides need to “become bilingual” and take the time to make their expectations clear to one another. This means building a strong partnership between the CMO and CIO and their respective teams.
Cross-functional collaboration between the two departments should be encouraged. This can be done by creating cross-departmental teams to review, analyse and report on the data. Finding and rewarding natural leaders who have the necessary empathy and diplomacy to ease cross-functional collaboration is also important.
In order for the relationship to work, people from both departments will need to adjust their mind-sets. Marketers will need to assist IT analytics teams in questioning assumptions and testing outcomes. And IT teams will have to listen closely to the needs of the marketing team and work with them to develop solutions.
The CIO must help the CMO understand “software-development trade-off decisions”. The two departments should take a broader view of data, viewing it as “an enterprise asset rather than a departmental asset”.
FIVE STEPS TO SUCCESS
The authors outline five prerequisites that the CMO and CIO must have in place, if their new partnership is going to work:
1) Clear decision governance. They recommend setting up a “decision-governance framework” to outline how the CIO and CMO will work together. This framework should cover “every stage in the journey of translating data into value, from setting strategy to constructing use cases, allocating funds, and deploying capabilities”.
The two teams will need to be specific about who should make what decision when. This will mean compromise on all sides but will inevitably speed up the decision making process and reduce duplicate work.
2) The right teams. The CMO and CIO must have a common agenda for defining and achieving analytics capabilities. They must decide whether to build a centre of excellence – where the marketing and IT teams can work together – or allow these skills to be distributed across departments and locations. They must also decide on the lines of reporting and work out which budget will pay for what.
To make these decisions, the authors recommend mapping out “the stages of the big data value chain from data architecting to delivery of customer offers” and assigning roles to each of these stages. Some stages will require multiple roles from both departments, they warn.
3) Transparency. The authors recommend biweekly or monthly progress meetings between the CMO and CIO to keep the project on track.
And the CMO-CIO relationship itself needs to be evaluated candidly on a quarterly basis.
The authors recommend using a scorecard to do this – tracking the progress of the project and identifying problems whilst avoiding blame.
4) Language. However much effort and goodwill the CMO and CIO exert, “the reality is that few CMOs or CIOs have the right balance between business and technology”. They advocate hiring translators to help.
The CMO needs to find people who speak the language of IT but understand customer and business needs. The CIO needs technical people who understand marketing and business.
5) Pilots. Lastly, the authors advocate a series of pilot schemes to test out the new teams and processes, advising: “Don’t be afraid to fail, but keep the projects and teams small enough at first to both fail and learn quickly.”
Big data requires todays CMOs and CIOs to work better together. Clear decision governance, the right teams and transparency are all key to forging a winning relationship between the marketing and IT departments.