CMOs, Not CIOs Leading Digital Transformation

by CXOtoday News Desk    Sep 21, 2016

Digital transformation

A lot has been said and written about the CMO-CIO relationship and their roles in the boardroom. With the rise of digital technologies and a focus on customer-centric growth, the ‘bonding’ between CIO and CMO is expected to become stronger today. Despite that a recent report by Altimeter titled ‘2016 State of Digital Transformation Report’, pointed out that even today, it is the CMO’s office and not the CIO’s office that can be credited for leading the digital transformation in the organization. 

Analyst Brian Solis pointed out that the CMOs of the organizations are leading the digital transformation, as it they who are driven by customer demand. The CIOs and CTOs are far behind when it comes to undertaking digital initiatives.

CMO leading the ‘digital’ way

According to the research, over one third of the CMOs are completely leading the efforts of the change. It was interesting to note, that CIOs and CTOs who are known to be the traditional leaders, who lead digital initiatives in companies, lag behind at 19%, whereas the 27% CEOs led the digital change in their companies.

Read more: Digital Leadership In The C-Suite, Are You Ready?

With these numbers, the questions are obvious as to what is driving the change, and the answer was not a total surprise; the customers. 55% of those surveyed in the report mentioned that ‘evolving customer behaviors and preferences’ were the primary reason such digital initiatives were being initiated. However, 71% of the participants also mentioned, that it was indeed a concern for them to figure out the behavior of new customers, and the impact the digital changes would have on them.

In fact, as the majority of respondents placed the prime importance on customers for the digital change in their businesses, it was revealed that 54% respondents felt that they had fully mapped-out their customers’ digital journey. In the report, this is referred to as ‘lack of true customer-centricity’.   

However, with what can be noticed commonly, as the Altimeter report points out, digital transformations and changes are barely singular in their aim, and the processes and objectives of doing so are entirely different. The top reasons pointed out were  innovation (81%), modernized IT infrastructure (80%), and improving operational agility (79%). To map out whether the changes in the organization bought about any measurable improvements, 41% respondents felt that their market share increased, 37% said that it made employees happier, and 30% pointed out to an increase in customer revenue figures, as a result of digital transformations. 

The research can well be criticized on grounds on certain empirical evidences. It was not clearly mentioned which criterion was used to get the measurement of the impact of the transformation, including Customer satisfaction, productivity, revenue or content analytics.

CIO: Time to rethink

Nonetheless, a gap still exists. Research firm Gartner for example notes that increasing marketing technology investments are demanding more involvement from IT leaders to enable marketing to achieve full business value. Kimberly Collins, research vice president at Gartner said, “IT leaders supporting marketing will need to develop a strong relationship with marketing leaders to help marketing derive the full potential from its IT investments.”

Read more: CMO Insights In The Digital Landscape

In this regard, Gartner predicted that CIOs who build strong relationships with CMOs will drive a 25 percent improvement in return on marketing technology investment. As more companies go through digital transformation, they witness a change in the business model – something which impacts both CIO and the CMO. Experts believe to leverage this digital transformation, CMOs should take a more expansive view of strategy, process, and business model changes that affect the organization as a whole.

“While Some CMOs can make the leap to digital business strategist, others will find their company hiring a Chief Digital Officer to play this role,” notes IT analyst Michael Krigsman in his blog.

He also warned that CIOs who do not make the transition from infrastructure focus to innovation and solutions provider risk becoming marginalized. “The challenge before CIOs is developing the skills, relationships, and credibility needed to participate in conversations about overall business strategy rather than remaining confined to technical and support matters in a world led by customer-centricity’,” he summed up.