you can see, Barb rightly points out that SaaS is a big part of this
change, accounting for much of the additional technology spending by
marketing leaders. There is also new spending by marketing on tablets
and mobile applications, and on customer-facing technologies like
point-of-sale marketing, e-commerce systems, channel management, and web
A few examples come to mind from some recent CIO discussions:
national service provider is arming its sales folks with tablets and
custom apps, paid for out of marketing’s sales enablement budget
- an international retailer has their marketing team working to deliver new virtual points of sale beyond their retail stores
- an entertainment organization is building a social, mobile, gamified cloud application (bingo!) to increase customer attraction and retention
All are very significant budgets directed primarily by their respective CMOs. And it is not just CMOs – as I said to Barb:
is just another business unit, and like all business units it is
spending its own budget in part on directly acquiring technology. Just
like finance, production, executive, operations, and others are.”
Some see this as a harbinger of doom for the CIO and for IT.
see this is just another example of the iterative epicycle of business
technology – and an opportunity for the innovative CIO to step forward
and enable a new set of choices for their business peers.
We saw a
similar scenario when mainframe resources were too costly and
constrained by the IT department, so business groups bought their own
distributed or ‘open’ systems. Similarly, departmental use of commodity
servers and personal computers were a reaction to the costs and
constraints of centrally managed midrange systems.
business managers realized that even the newer, simpler technology was
difficult and costly to maintain, and more importantly that managing
technology was not their core competency. So IT departments and CIOs
stepped up, took over management of these new technologies, and freed up
business departments to focus on their core goals.
Now we are
seeing this with SaaS and other new technologies, as business
departments acquire technology themselves, in reaction to the
constraints and costs of today’s IT department. And I expect it to play
out the same way, with IT eventually taking back these new technologies
and managing them for the business.
If your business and IT people
are building the right relationships, then you will figure out together
how to do this, rather than just wait for the business to react. IT
will be the expert consultant on how business transactions work, the
workflow that exists in the business, where the data is, etc. The
skillset of IT will become more like an MBA than an MSc., open to doing
anything that is faster, better, and/or cheaper for the business.
we do it right, IT becomes more like a system integrator and less like a
data center manager. With deep knowledge of business processes, IT can
bring creative ideas to life in an “embedded” partnership with the
business. In the end, much of this ‘rogue IT’ spending will transition
back to the CIO, who will become a business service orchestrator – in addition to being an IT manager (because so-called ‘legacy’ IT is not going anywhere either).
More or less.
is just one example of where I see this happening. Clearly SaaS is a
very different proposition from distributed systems, commodity servers,
or personal computers. SaaS acquisition and termination is quicker and
easier; SaaS providers do much of the work, like applying patches or
upgrades; SaaS applications frequently allow substantial customization
without coding or scripting. Some SaaS applications are simple,
inexpensive, non-critical, low-maintenance, arcane, and/or embedded, and
it will not make sense for IT to take them over.
However, spend a
couple of years working with, customizing, and populating many SaaS
applications – especially enterprise applications with persistent data
accumulation, like CRM, Financial Management, Marketing Automation, or
ERP – and you will see that they are still at heart complex IT systems,
with a substantial administrative requirement. Moreover, they cause
substantive technology issues when non-IT people find they need to
integrate these applications with the enterprise general ledger,
order-entry, or human resource systems. Maintaining enterprise policies
for security and compliance, including identity and access controls,
data loss prevention, data leakage, retention and disposal policies,
etc. add even more maintenance requirements.
So over time:
will not want to spend the time and effort to update their SaaS CRM to
accommodate new territories or to clean up aged data
will not want to own a development team to maintain and enhance a
customized SaaS accounting suite to align with business changes
- Marketing will not want to code and run ETL to migrate program and campaign content from one SaaS marketing system to another
will not want to dedicate resources to updating a SaaS ERP application
to work with new inventory tracking technologies
- No one will
want to spend the time, money, and resources to integrate their SaaS
applications with each other and with enterprise applications – or to
make sure they are secure and compliant
Business units will
want to focus on business goals – sales, accounting, marketing,
manufacturing, – and not ‘waste their time’ on managing technology, even
SaaS. In time, business units will increasingly find that managing many
SaaS applications detract from their core competencies, and will ask IT
to take over these efforts instead.
Technologies uses many SaaS applications, most of them originally
acquired through line of business budgets (including sales, marketing,
and operations). However, our CIO is starting to take over many of our
SaaS programs – including the staff and budget to manage, maintain,
customize, integrate, and enhance them as needed. He is becoming our
Business Service Conductor, providing the services the business areas
want, while freeing them up to focus on their core goals, rather than
the acquisition, management, and delivery of SaaS applications.
believe this is an innovative move, and one that more IT leaders will
follow. More CIOs will need to step up to embrace the cloud and other
new technologies. The best CIOs will not just take over management of
these technologies when the business asks them to, but will actively
lead the adoption (and management) of these new technologies, so that
other business leaders in sales, finance, marketing, production, and
more can get back to their own core competencies.
Just as they always have before.
Just as many innovative CIOs are already doing.