CMO and CIO-Digital Transformation Purchases
As CIOs of large companies tend to be the primary decision-makers when it comes to purchasing enterprise IT products and the CMOs are often tasked with the challenge of creating digital transformations and are often increasing the technology aspect of their marketing approach and budget, the relationship between the two is a respectful, collaborative one that allows them to achieve their shared goals and be successful in their jobs. A few CIOs of large companies have made the case that having an authentic, collaborative relationship with the CMO(s) of their company was very important for improving their customer experience and to have their company undergo a successful digital transformation.
RECOMMENDED RELATIONSHIP BETWEEN THE CMO AND CIO OF A COMPANY
- In order to reach customers and improve their marketing strategies, the CMO and CIO of companies must work closely in order to help their corporation improve its digital marketing and to attract new customers.
- Large companies like CarMax that have done this have reached marketing success and kept up with their competition, especially online competitors.
- In order to create a digital transformation in a large company, collaboration between the CMO and CIO (as well as between all relevant personnel) must set a set of desired outcomes and principles when collaborating such as a commitment to simplicity, encouraging collaborative decision-making between IT and marketing leaders, and supporting a culture of confident humility.
TECHNOLOGY BUDGETS FOR CMOS
- Often times, technology counts as 29% of the marketing budget for a company with IT personnel becoming increasingly involved in digital marketing and transformations. Due to this merge, IT personnel can also help marketers and CMOs select the right enterprise IT services, thus tightening the relationship between the two departments.
- According to IDG’s 2018 State of the CIO Survey, 42% of global marketing teams specifically save a budget for investments in technology products and services. In addition, 51% of IT leaders share budget ownership for organizational marketing efforts with marketing colleagues.
- In an international study of IT budgets across numerous companies, it was determined that the primary decision-makers of technology purchases in 32% of companies in North America are COO, CFO, or CMO.
- Companies that have 500-5,000+ people (in both Europe and North America) are much more likely to have their COO/CFO/CMO as the primary decision makers of technology purchases.
EXAMPLES OF COLLABORATIVE RELATIONSHIPS BETWEEN CIOS & CMOS
- The CIO of Adobe states that improving customer experiences for Adobe requires perpetual relationships between IT and marketers to enhance customer experiences and the CIO of IPG Medibrands argues that the most successful CMOs he's worked with have their own technology budget that rivals the company's own IT/infrastructure budget and employ their own data scientists.
- The CIO of Vail Resorts, Inc. describes how he spends the most time with the company's CMO in order to create better digital customer experiences and advises other CIOs to "recognize that strong trust-based partnerships across the executive suite are the key to success".
In order to determine the relationship between the CMO and CIO of large companies in terms of digital transformation, we began by scouring reports of companies' IT budgets. The goal was to determine how the CMO might influence IT product purchases or budget. Through this search, we found reports and studies on the IT budgets of numerous companies as well as decision-makers for purchases of new IT products. We also searched specifically at how many companies had their CIOs or CMOs as the primary decision makers of purchasing new IT products.
As these studies included companies from North America and Europe, we also deciphered the companies by their number of employees and location to gain an estimate of how many large American companies had their CIOs or CMOs as the decision makers. Because there was no publicly available information specifically on the IT budgets of large American companies, these studies were the next best source of information. In addition, there were reports that state that CMOs are increasing their technology budget for marketing purposes and that IT personnel were becoming increasingly involved their IT purchases and product set up. These reports indicated to me that due to this budget increase, the CMO-CIO relationship would have to be a respectful, collaborative one as they're more likely to be working closely.
To gain an understanding of the CMO-CIO relationship of large companies, we searched for digital transformations within companies as there were numerous articles on how and why the CMO and CIO must work together in order to implement a successful digital transformation. We also looked at articles that argued why the CMO and CIO must work together to improve their customer experiences as there were several articles on this. We analyzed them to see if there was any mention of purchasing relevant IT services and for examples of actual companies that saw success when their CMO and CIO collaborated respectfully.
In order to provide insights on the relationship between the CMO and CIO of Fortune 500 companies, we researched accounts of large companies that have seen success when their CMO and CIO collaborate to improve their customer experience and to be able to compete with their digital competitors. This proved difficult to find anything specifically on Fortune 500 companies, so we changed our strategy to look at CIOs and CMOs of large companies. We found an article that contained accounts from three different CIOs on how their work relationship with their CMO helped their company. After independently confirming that the CIOs' companies employed more than 500 people and meet the large company criteria, we decided to use this as an insight as it provided first-hand accounts of actual CIO-CMO relationships and why they are so important. It also led us to conclude that CIOs and CMOs generally work together in a collaborative, respectful way as their goals and desired outcomes are usually the same.