Tag Archives: CIO
The CIO Challenged
If you ask a CIO today about their challenges, several things would clearly make the list. CIOs that I know personally are feeling a bit of Future Shock. They say that things are changing a lot faster these days than they did in the past. One CIO said to me in exasperation, “things are changing every 18 months”. Given this, I recently sat down with CIOs from several different industries to get their perspectives on how the CIO role is changing and the challenges they feel in their role as CIO. This post will focus upon the latter.
The healthcare CIO participating said that CIOs need to manage four large mega trends simultaneously—mobile, cloud, social, and big data. At the same time in healthcare, they have the added complexity of Meaning Use, ICT 10, and HL7. For these reasons, this CIO worries about keeping the IT lights on while at the same time helping the business to expand. This CIO sees healthcare is clearly entering an era of ubiquitous computing with the iPad becoming the rounding and vitals instrument of choice. This links mobility, integration, and compliance around a standard like HL7. HL7 provides this CIO with a framework for exchanging, integrating, sharing, and retrieving of electronic health information. Like other CIOs that we talked to, our healthcare CIO says he needs to understand his enterprises business better in order to be a better partner.
Our next CIO is from the insurance. He sees CIOs in general being challenged to move from being a builder of stuff to an orchestrator of business services. This CIO sees cloud and loosely oriented partnerships bringing vendor management to the forefront. At the same time, he feels challenged to provide application integration in a service oriented manner. He says that IT organizations need today to orchestrate across IT regardless of device. As well, he believes that IT organizations need to stitch together an IT that is fungible and support service oriented architecture. At the same time, he says that his business users “believe that data is strategic but they need it provided to them in a way that creates predictive capabilities and drives top line revenue”. We and our business customers know that we need to fix our mutual data problems in order to use data better. This CIO said believes that he needs to fix his enterprise’s data hygiene first in order to improve business outcomes.
The Manufacturing CIO participating said that CIOs have an opportunity to create informative analytics and help the business find value. However, this CIO worries that CEOs and CFOs are about to start complaining to their IT organizations that the information garnered from Big Data and Business Intelligence does not really make them more money. He claims, to make more money, IT organizations need to connect the dots between their transactional systems, BI systems, and the planning systems. More specifically, they need to convert insight into action. To do this, the business needs to be enabled to be more proactive and to cut the time it takes to execute. This means that IT needs to enable the enterprise to generate value different than its competitors. This CIO worries, therefore, about IT’s ability to drive flexibility and agility. We need to respond to the rate of change and be able to prototype faster at the same time as we cut the cost of failure. This CIO claims that CIOs needs to more actively manage the information lifecycle even though the business may own the data. Lastly, this CIO says that IT organizations need to be more forward looking. We need to be looking at things cross discipline. We need to be looking for new business insights. We have piles and piles of data from which to draw interesting insights from. How do you connect and create new business insights?
Getting the CFOs to understand that technology is not a cost center was really important to our 4th CIO. We need to get everyone to understand that IT isn’t separate from the business. At the same time, we need to get business leaders to understand technology better. There is a real West Coast vs. East Coast split regarding business technology literacy. We need business leaders to start asking for digital services that support their product and service offerings. And this is all about data. “Think about it. What we do in IT is all about the intake of data, storing data, processing data, and analyzing data. And we need to provide the intelligence to make better decisions. Competing with analytics is what we need to enable. Like an athlete that needs muscles—data needs cleaning, security, mastering, and governance to enable the business to compete with analytics”.
Our broadcast CIO is focused on the explosion of Big Data. “I need to get my management team exposed to Big Data Analysis. I need as well to get the resources to do this well”. We need for example to get the business answers to its questions around customer behavior. From an integration perspective, this CIO said that she needs to get service based technology deployed. At the same time, she said I need to be able to have business apps for my business and consumer users to subscribe. This CIO said that speed to clients from integrated systems is a big issue. We need today to connect everything together.
CIOs as whole feel are feeling challenged
CIOs regardless of industry feel challenged. They feel challenged by changes coming at them in general and in industry specific mandates and standards. They clearly need to move faster and to move from organizations that are about getting the internals of IT running well to organizations that can absorb new technology models, scale up and down in “Internet time”, and flex seamlessly to support business model innovation. For more information, see the related links below:
When you talk to CIOs today, you strongly get the feeling that that the CIO role is about to change. One CIO said to me that the CIO is the midst of “a sea state change”. Recently, I got to talk with a half a dozen CIOs on what is most important to their role and how they see the role as a whole changing over the next few years. Their answers were thought provoking and worthy of broader discussion.
CIOs say it is becoming less and less common for the CIO to come up through the technical ranks. One CIO said it used to common for one to become a CIO after being a CTO but this has changed. More and more business people are becoming CIOs. The CIO role today is “more about understanding the business than to understanding technology. It is more about business alignment than technology alignment”. This need for better business alignment led one CIO to say that consulting is a great starting point for a future IT leader. Consulting provides a future IT leader with the following: 1) vertical expertise; 2) technical expertise; and 3) systems integration expertise. Another CIO suggested that the CIO role sometimes is being used these days as a rotational position for a future business leader. “It provides these leaders with technical skills that they will need in their career.” Regardless, it is increasingly clear that business expertise versus technical expertise is much more important.
How will the CIO role change?
CIOs, in general, believe that their role will change in the next five years. One CIO insisted that CIOs are going to continue to be incredibly important to their enterprises. However, he said that CIOs have the opportunity to create analytics that guide the business in finding value. For CIOs to do this, they need to connect the dots between transactional systems, BI, and the planning systems. They need to convert data into action. This means they need to enable the business to be proactive and cut the time it takes for them to execute. CIOs need in his view to enable their enterprises to generate differentiated value than competitors.
Another CIO sees the CIOs becoming the orchestrator vs. the builder of business services. This CIO said that “building stuff is now really table stakes”. Cloud and loosely oriented partnerships is bringing vendor management to the forefront. Agreeing with this point of view, a third CIO says that she sees CIOs moving from an IT role into a business role. She went onto say that “CIOs need to understand the business better and be able to partner better with the business. They need to understand the role for IT better and this includes understanding their firm’s business models better”.
A final CIO suggests something even more radical. He believes that the CIO role will disappear altogether or morph into something new. This CIO claims CIOs have the opportunity to become the chief digital officer or the COO. After all, the CIO is about implementing business processes.
For more technical CIOs, this CIO sees them reverting into CTOs but he worries at the same time about the importance of hardware and platform issues with the increasing importance of cloud—this type of role is going to become less and less relevant. This same CIO says that, in passing, CIOs screwed up a golden opportunity 10 years ago. At this time, CIOs one by one clawed their way to the table and separated themselves from the CFO. However, once they were at the table, they did not change their game. They continued to talk bits and bytes versus business issues. And one by one, they are being returned to the CFO to manage.
So change is inevitable. CIOs need to change their game or be changed by external forces. So let’s start the debate right now. How do you see the CIO role changing? Express your opinion. Let’s see where you and the above CIOs agree and more importantly where you differ?
Business leaders share with Fortune Magazine their view of Big Data
Fortune Magazine recently asked a number of business leaders about what Big Data means to them. These leaders provide three great stories for the meaning of Big Data. Phil McAveety at Starwood Hotels talked about their oldest hotel having a tunnel between the general manager’s office and the front desk. This way the general manager could see and hear new arrivals and greet each like an old friend. Phil sees Big Data as a 21st century version of this tunnel. It enables us to know our guests and send them offers that matter to them. Jamie Miller at GE says Big Data is being about transforming how they service their customers while simplifying the way they run their company. Finally, Ellen Richey at VISA says that big data holds the promise of making new connections between disperse bits of information creating value.
Everyone is doing it but nobody really knows why?
I find all of these definitions interesting, but they are all very different and application specific. This isn’t encouraging. The message from Gartner is even less so. They find that “everyone is doing it but nobody really knows why”. According to Matt Asay, “the gravitational pull of Big Data is now so strong that even people who haven’t a clue as to what it’s all about report that they are running Big Data projects”. Gartner found in their research that 64% of enterprises surveyed say they’re deploying or planning to deploy Big Data projects. The problem is that 56% of those surveyed are struggling trying to determine how to get value out of big data, and 23% of those surveyed are struggling at how to define Big Data. Hopefully, none of the latter are being counted in the 64%. . Regardless, Gartner believes that the number of companies with Big Data projects is only going to increase. The question is how many of projects are just a recast of an existing BI project in order to secure funding or approval. No one will ever know.
Managing the hype phase of Big Data
One CIO that we talked to worries about this hype phase of Big Data. He says the opportunity is to inform analytics and guiding and finding business value. However, worries whether past IT mistakes will repeat themselves. This CIO believes that IT has gone through three waves. IT has grown from homegrown systems to ERP to Business Intelligence/Big Data. ERP was supposed to solve all the problems of the homegrown solutions but it did not provide anything more than information on transactions. You could not understand what is going on out there with ERP. BI and Big Data is trying to go after this. However, this CIO worries that CEOs/CFOs will soon start complaining that the information garnered does not make the business more money. He worries that CEOs and CFOs will start effectively singing the Who song, “We won’t get fooled again.”
This CIO believes that to make more money, Big Data needs to connect the dots between transactional systems, BI, and planning systems. It needs to convert data into business value. This means Big Data is not just another silo of data, but needs to be connected and correlated to the rest of your data landscape to make it actionable. To do this, he says it needs to be proactive and cut the time to execution. It needs to enable the enterprise to generate value different than competitors. This, he believes mean that it needs to orchestrate activities so they maximize profit or increase customer satisfaction. You need to get to the point where it is sense and response. Transactional systems, BI, and planning systems need to provide intelligence to allow managers to optimize business processes execution. According to Judith Hurwitz, optimization is about establishing the correlation between streams of information and matching the resulting pattern with defined behaviors such as mitigating a threat or seizing an opportunity.”
Don’t leave your CEO and CFO with a sense of deja vu
In sum, Big Data needs to go further in generating enough value to not leave your CEO and CFO with a sense of deja vu. The question is do you agree? Do you personally have a good handle on what Big Data is? And lastly, do you fear a day when the value generated needs to be attested to?
Recently, I had the opportunity to interview half dozen CIOs and half dozen CFOs. Kind of like a marriage therapist, I got to see each party’s story about the relationship. CFOs, in particular, felt that the quality of the relationship could impact their businesses’ success. Armed with this knowledge, I wanted to see if I could help each leader build a better working relationship. Previously, I let CIO’s know about the emergence and significance of the strategic CFO. In today’s post, l will start by sharing the CIOs perspective on the CFO relationship and then I will discuss how CFOs can build better CIO relationships.
CIOs feel under the gun these days!
If you don’t know, CIOs feel under the gun these days. CIOs see their enterprises demanding ubiquitous computing. Users want to use their apps and expect corporate apps to look like their personal apps such as Facebook. They want to bring their own preferred devices. Most of all, , they want all their data on any device when they need it. This means CIOs are trying to manage a changing technical landscape of mobile, cloud, social, and big data. These are all vying for both dollars and attention. As a result, CIOs see their role in a sea change. Today, they need to focus less on building things and more on managing vendors. CIOs say that they need to 1) better connect what IT is doing to support the business strategy; 2) improve technical orchestration; and 3) improve process excellence. This is a big and growing charter.
CIOs see the CFO conversation being just about the numbers
CIOs worry that you don’t understand how many things are now being run by IT and that historical percentages of revenue may no longer appropriate. Think about healthcare, which used to be a complete laggard in technology but today it is having everything digitalized. Even a digital thermometer plugs into an iPad so it directly communicates with a patient record. The world has clearly changed. And CIOs worry that you view IT as merely a cost center and that you do not see the value generated through IT investment or the asset that information provides to business decision makers. However, the good news is that I believe that a different type of discussion is possible. And that CFOs have the opportunity to play an important role in helping to shape the value that CIOs deliver to the business.
CFOs should share their experience and business knowledge
CFOs that I talked to said that they believe the CFO/CIO relationship needs to be complimentary and that the roles have the most concentric rings. These CFOs believe that the stronger the relationship the better it is for their business. One area that you can help the CIO is in sharing your knowledge of the business and business needs. CIOs are trying to get closer to the business and you can help build this linkage and to support requests that come out of this process. Clearly, an aligned CFO can be “one of the biggest advocates of the CIO”. Given this, make sure that you are on your CIOs Investment Committee.
Tell your CIO about your data pains
CFOs need to be good customers too. CFOs that I talked to told me that they know their business has “a data issue”. They worry about the integrity of data from the source. CFOs see their role as relying increasingly on timely, accurate data. They, also, know they have disparate systems and too much manual stuff going on in the back office. For them, integration needs to exist from the frontend to the backend. Their teams personally feel the large number of manual steps.
For this reasons, CFOs, we talked to, believe that the integration of data is a big issue whether they are in a small or large business. Have you talked to your CIO about data integration or quality projects to change the ugliness that you have to live with day in day out? It will make you and the business more efficient. One CFO was blunt here saying “making life easier is all about the systems. If the systems suck then you cannot trust the numbers when you get them. You want to access the numbers easily, timely, and accurately. You want to make easier to forecast so you can set expectations with the business and externally”.
At the same time, CFOs that I talked to worried about the quality of financial and business data analysis. Once he had data, he worried about being able to analyze information effectively. Increasingly, CFOs say that they need to help drive synergies across their businesses. At the same time, CFOs increasingly need to manage upward with information. They want information for decision makers so they can make better decisions.
Changing the CIO Dialog
So it is clear that CFOs like you see data as a competitive advantage in particular financial data. The question is, as your unofficial therapist, why aren’t you having a discussion with your CIO not just about the numbers or financial justification for this or that system and instead, asking about the+ integration investment that can make your integration problems go away.
Last week I had the opportunity to attend the Gartner Security and Risk Management Summit. At this event, Gartner analysts and security industry experts meet to discuss the latest trends, advances, best practices and research in the space. At the event, I had the privilege of connecting with customers, peers and partners. I was also excited to learn about changes that are shaping the data security landscape.
Here are some of the things I learned at the event:
- Security continues to be a top CIO priority in 2014. Security is well-aligned with other trends such as big data, IoT, mobile, cloud, and collaboration. According to Gartner, the top CIO priority area is BI/analytics. Given our growing appetite for all things data and our increasing ability to mine data to increase top-line growth, this top billing makes perfect sense. The challenge is to protect the data assets that drive value for the company and ensure appropriate privacy controls.
- Mobile and data security are the top focus for 2014 spending in North America according to Gartner’s pre-conference survey. Cloud rounds out the list when considering worldwide spending results.
- Rise of the DRO (Digital Risk Officer). Fortunately, those same market trends are leading to an evolution of the CISO role to a Digital Security Officer and, longer term, a Digital Risk Officer. The DRO role will include determination of the risks and security of digital connectivity. Digital/Information Security risk is increasingly being reported as a business impact to the board.
- Information management and information security are blending. Gartner assumes that 40% of global enterprises will have aligned governance of the two programs by 2017. This is not surprising given the overlap of common objectives such as inventories, classification, usage policies, and accountability/protection.
- Security methodology is moving from a reactive approach to compliance-driven and proactive (risk-based) methodologies. There is simply too much data and too many events for analysts to monitor. Organizations need to understand their assets and their criticality. Big data analytics and context-aware security is then needed to reduce the noise and false positive rates to a manageable level. According to Gartner analyst Avivah Litan, ”By 2018, of all breaches that are detected within an enterprise, 70% will be found because they used context-aware security, up from 10% today.”
I want to close by sharing the identified Top Digital Security Trends for 2014
- Software-defined security
- Big data security analytics
- Intelligent/Context-aware security controls
- Application isolation
- Endpoint threat detection and response
- Website protection
- Adaptive access
- Securing the Internet of Things
The strategic CFO is different than the “1975 Controller CFO”
Traditionally, CIOs have tended to work with what one CIO called a “1975 Controller CFO”. For this reason, the relationship between CIOs and CFOs was expressed well in a single word “contentious”. But a new type of CFO is emerging that offers the potential of different type of relationship. These so called “strategic CFOs” can be an effective ally for CIOs. The question is which type of CFO do you have? In this post, I will provide you with a bit of a litmus test so you can determine what type of CFO you have but more importantly, I will share how you can take maximum advantage of having a strategic-oriented CFO relationship. But first let’s hear a bit more of the CIOs reactions to CFOs.
Views of CIOs according to CIO interviews
Clearly, “the relationship…with these CFOs is filled with friction”. Controller CFOs “do not get why so many things require IT these days. They think that things must be out of whack. One CIO said that they think technology should only cost 2-3% of revenue while it can easily reach 8-9% of revenue these days.” Another CIO complained by saying their discussion with a Controller CFOs is only about IT productivity and effectiveness. In their eyes, this has limited the topics of discussion to IT cost reduction, IT produced business savings, and the soundness of the current IT organization. Unfortunately, this CIO believe that Controller CFOs are not concerned with creating business value or sees information as an asset. Instead, they view IT as a cost center. Another CIO says Controller CFOs are just about the numbers and see the CIO role as being about signing checks. It is a classic “demand versus supply” issue. At the same times, CIOs say that they see reporting to Controller CFO as a narrowing function. As well, they believe it signals to the rest of the organization “that IT is not strategic and less important than other business functions”.
What then is this strategic CFO?
In contrast to their controller peers, strategic CFOs often have a broader business background than their accounting and a CPA peers. Many have, also, pursued an MBA. Some have public accounting experience. Others yet come from professions like legal, business development, or investment banking.
More important than where they came from, strategic CFOs see a world that is about more than just numbers. They want to be more externally facing and to understand their company’s businesses. They tend to focus as much on what is going to happen as they do on what has happened. Remember, financial accounting is backward facing. Given this, strategic CFOs spend a lot of time trying to understand what is going on in their firm’s businesses. One strategic CFO said that they do this so they can contribute and add value—I want to be a true business leader. And taking this posture often puts them in the top three decision makers for their business. There may be lessons in this posture for technology focused CIOs.
Why is a strategic CFO such a game changer for CIO?
One CIO put it this way. “If you have a modern day CFO, then they are an enabler of IT”. Strategic CFO’s agree. Strategic CFOs themselves as having the “the most concentric circles with the CIO”. They believe that they need “CIOs more than ever to extract data to do their jobs better and to provide the management information business leadership needs to make better business decisions”. At the same time, the perspective of a strategic CFO can be valuable to the CIO because they have good working knowledge of what the business wants. They, also, tend to be close to the management information systems and computer systems. CFOs typically understand the needs of the business better than most staff functions. The CFOs, therefore, can be the biggest advocate of the CIO. This is why strategic CFOs should be on the CIOs Investment Committee. Finally, a strategic CFO can help a CIO ensure their technology selections meet affordability targets and are compliant with the corporate strategy.
Are the priorities of a strategic CFO different?
Strategic CFOs still care P&L, Expense Management, Budgetary Control, Compliance, and Risk Management. But they are also concerned about performance management for the enterprise as whole and senior management reporting. As well they, they want to do the above tasks faster so finance and other functions can do in period management by exception. For this reason they see data and data analysis as a big issue.
Strategic CFOs care about data integration
In interviews of strategic CFOs, I saw a group of people that truly understand the data holes in the current IT system. And they intuit firsthand the value proposition of investing to fix things here. These CFOs say that they worry “about the integrity of data from the source and about being able to analyze information”. They say that they want the integration to be good enough that at the push of button they can get an accurate report. Otherwise, they have to “massage the data and then send it through another system to get what you need”.
These CFOs say that they really feel the pain of systems not talking to each other. They understand this means making disparate systems from the frontend to the backend talk to one another. But they, also, believe that making things less manual will drive important consequences including their own ability to inspect books more frequently. Given this, they see data as a competitive advantage. One CFO even said that they thought data is the last competitive advantage.
Strategic CFOs are also worried about data security. They believe their auditors are going after this with a vengeance. They are really worried about getting hacked. One said, “Target scared a lot of folks and was to many respects a watershed event”. At the same time, Strategic CFOs want to be able to drive synergies across the business. One CFO even extolled the value of a holistic view of customer. When I asked why this was a finance objective versus a marketing objective, they said finance is responsible for business metrics and we have gaps in our business metrics around customer including the percentage of cross sell is taking place between our business units. Another CFO amplified on this theme by saying that “increasingly we need to manage upward with information. For this reason, we need information for decision makers so they can make better decisions”. Another strategic CFO summed this up by saying “the integration of the right systems to provide the right information needs to be done so we and the business have the right information to manage and make decisions at the right time”.
So what are you waiting for?
If you are lucky enough to have a Strategic CFO, start building your relationship. And you can start by discussing their data integration and data quality problems. So I have a question for you. How many of you think you have a Controller CFO versus a Strategic CFO? Please share here.
Recently, we posted an initial discussion between Informatica’s CMO Marge Breya and CIO Eric Johnson, explaining how CIOs and CMOs can align and thrive. In the dialog below, Breya and Johnson provide additional detail on how their departments partner effectively.
Q: Pretty much everyone agrees that marketing has changed from an art to a science. How does that shift translate into how you work together day to day?
Eric: The different ways that marketers now have to get to the prospects and customers to grow their marketshare has exploded. It used to be a single marketing solution that was an after-thought, and bolted on to the CRM solution. Now, there are just so many ways that marketers have to consider how they market to people. It’s driven by things going on in the market, like how people interact with companies and the lifestyle changes people have made around mobile devices.
Marge: Just look at the sheer number of systems and sources of data we care about. If you want to understand upsell and cross-sell for customers you have to look at what’s happening in the ERP system, what’s happened from a bookings standpoint, whether the customer is a parent or child of another customer, how you think about data by region, by industry by job title. And there’s how you think about successful conversion of leads. Is it the way you’d predicted? What’s your most valuable content? Who’s your most valuable outlet or event? What’s your ROI? You can’t get that from any one single system. More and more, it’s all about conversion rates, about forecasting and theories about how the business is working from a model standpoint. And I haven’t even talked about social.
Q: With so many emerging technologies to look at, how do CMOs reconcile the need to quickly add new products, while CIOs reconcile the need for everything to work securely and well together?
Eric: There’s this yin and yang that’s starting to build between the CIO and the CMO as we both understand each other and the world we each live in, and therefore collaborate and partner more. But at the same time, there’s a tension between a CMO’s need to bring in solutions very quickly, and the CIO’s need to do some basic vetting of that technology. It’s a tension between speed vs. scale and liability to the company. It’s on a case-by-case basis, but as a CIO you don’t say “no.” You give options. You show CMOs the tradeoffs they’re going to make.
There are also risks that are easy to take and worth taking. They won’t cause any problems with the enterprise on a security or integration perspective, so let’s just try it. It may not work — and that’s OK.
Marge: There’s temptation across departments for the shiny new object. You’ll hear about a new technology, and you think this might solve our problems, or move the business faster. The tension even within the marketing department is: do we understand how and if it will impact the business process? And do we understand how that business process will have to change if the shiny new object comes on board?
Q: CMOs are getting data from potentially hundreds of sources, including partners, third parties, LinkedIn and Google. How do the two of you work together to determine a trustworthy data source? Do you talk about it?
Eric: The issue of trusting your data and making sure you’re doing your due diligence on it is incredibly important. Without doing that, you are running the risk of finding yourself in a very tricky situation from a legal perspective, and potentially a liability perspective. To do that, we have a lot of technology that helps us manage a lot data sources coming into a single source of truth.
On top of that, we are working with marketers who are much more savvy about technology and data. And that makes IT’s job easier — and our partnership better — because we are now talking the same language. Sometimes it’s even hard to tell where the line between the two groups actually sits. Some of the marketing people are as technical as the IT people, and some of the IT people are becoming pretty well-versed in marketing.
Q: How do you decide what technologies to buy?
Marge: A couple of weeks ago we went on a shopping trip, and spent the day at a venture capital firm looking at new companies. It was fun. He and I were brainstorming and questioning each other to see if each technology would be useful, and could we imagine how everything would go together. We first explored possibilities, and then we considered whether it was practical.
Eric: Ultimately, Marge owns the budget. But before the budgeting cycle we sit down to discuss what things she wants to work on, and whether she wants to swap technology out. I make sure Marge is getting what she needs from the technologies. There’s a reliance on the IT team to do some due diligence on the technical aspects of this technology: Does it work. Do we want to do business with these people? Is it going to scale? So each party has a role to play in evaluating whether it’s a good solution for the company. As a CIO you don’t say “no” unless there’s something really bad, and you hope you have a relationship with the CMO where you can say here are the tradeoffs you’re making. You say no one has an agenda here, but here are the risks you have to be ok taking. It’s not a “no.” It’s options.
Salesforce.com is one of the most widely used cloud applications across every industry. Initially, Salesforce gained dominance from mid-market customers due to the agility and ease of deployment that the SaaS approach delivered. A cloud-based CRM system enabled SMB companies to easily automate sales processes that recorded customer interactions during the sales cycle and scale without costly infrastructure to maintain. This resulted in faster growth, thereby showing rapid ROI of a Salesforce deployment in most cases.
The Eye of the Enterprise
When larger enterprises saw the rapid growth that mid-market players had achieved, they realized that Salesforce was a unique technology enabler capable of helping their businesses to also speed time to market and scale more effectively. In most enterpises, the Salesforce deployments were driven by line-of-business units such as Sales and Customer Service, with varying degrees of coordination with central IT groups – in fact, most initial deployments of Salesforce orgs were done fairly autonomously from central IT.
With Great Growth Comes Greater Integration Challenges
When these business units needed to engage with each other to run cross functional tasks, the lack of a single customer view across the siloed Salesforce instances became a problem. Each individual Salesforce org had its own version of the truth and it was impossible to locate where in the sales cycle each customer was in respect to each business unit. As a consequence, cross-selling and upselling became very difficult. In short, the very application that was a key technology enabler for growth was now posing challenges to meet business objectives.
Scaling for Growth with Custom Apps
While many companies use the pre-packaged functionality in Salesforce, ISVs have also begun building custom apps using the Force.com platform due to its extensibility and rapid customization features. By using Salesforce to build native applications from the ground up, they could design innovative user interfaces that expose powerful functionality to end users. However, to truly add value, it was not just the user interface that was important, but also the back-end of the technology stack. This was especially evident when it came to aggregating data from several sources, and surfacing them in the custom Force.com apps.
On April 23rd at 10am PDT, you’ll hear how two CIOs from two different companies tackled the above integration challenges with Salesforce: Rising Star finalist of the 2013 Silicon Valley Business Journal CIO Awards, Eric Johnson of Informatica, and Computerworld’s 2014 Premier 100 IT Leaders, Derald Sue of InsideTrack.
Research firm Gartner, Inc., sent shockwaves across the technology landscape when it forecast CMOs will spend more on IT than CIOs by 2017[i]. The rationale? “We frequently hear our technology and service provider clients tell us they are dealing with business buyers more, and need to “speak the language.” Gartner itself has fueled this inferno with assertions such as, “By 2017 the CMO will spend more on IT than the CIO” (see “Webinar: By 2017 the CMO Will Spend More on IT Than the CIO”).”[ii] In the two years since Gartner first made that prediction, analysts and pundits have talked about a CIO/CMO battle for data supremacy — describing the two roles as “foes” inhabiting “separate worlds[iii]” that don’t even speak the same language.
But when CIOs are from Mars and CMOs are from Venus, their companies can end up with disjointed technologies that don’t play well together. The result? Security flaws, no single version of “truth,” and regulatory violations that can damage the business. The trick, then, is aligning the CIO and CMO planets.
Informatica’s CMO Marge Breya and CIO Eric Johnson show how they do it.
Q: There’s been a lot of talk lately about how CMOs are now the biggest users of data. That represents a shift in how CMOs and CIOs traditionally have worked together. How do you think the roles of the CMO and CIO need to mesh?
Eric: As I look across the lines of business, and evaluate the level of complexity, the volume of data and the systems we’re supporting, marketing is now by far the most complex part of the business we support. The systems that they have, the data that they have, has grown exponentially over the last four or five years. Now more than ever, [CMOs and CIOs are] very much attached at the hip. We have to be working in conjunction with one another.
Marge: Just to add to that I’d say over the last five years, we’ve been attached to things like CRM systems, or partner relationship systems. From a marketing standpoint, it has really been about management: How do you have visibility into what’s happening with the business. But over the last couple of years it’s become increasingly more important to focus on the “R” word — the relationship: How do you look at a customer name and understand how it relates to their past buying behavior. As a result, you need to understand how information lives from system to system, all across a time series, in order to make really great decisions. The “relate’ word is probably most important, at least in my team right now, and it’s not possible for me to relate data across the organization without having a great relationship with IT.
Q: So how often do you find yourselves talking together?
Eric: We talk to each other probably weekly, and I think our teams work together daily. There’s a constant collaboration and making sure that we’re in sync. You hear about the CIO/CMO relationship. I think it should be an easy relationship because there’s so much going on technology-wise and data-wise that the CMOs are becoming much more technically knowledgeable, and CIOs are starting to understand more and more what’s going on in their business that the line between them should be all about how you work together.
Marge: Of all the business partners in the company, Eric … helps us in marketing reimagine how marketing can be done. If the two of us can go back and forth, understand what’s working and what’s not working, and reimagine how we can be far more effective, or productive or know new things — to me that’s the judge of a healthy relationship between a CIO and a CMO. And luckily, we have that.
Q: It seems as if 2013 was the year of “big data.” But a Gartner survey[iv] said “The adoption is still at the early stages with fewer than 8% of all respondents indicating their organization has deployed big data solutions.” What do you think are the issues that are making it so difficult for companies?
Eric: The concept of big data is something companies want to get involved in. They want to understand how they can leverage this fast-growing volume of data from various sources. But the challenge is being able to understand what you’re looking for, and to know what kind of questions you have.
Marge: There’s a big focus on big data, almost for the sake of it in some cases. People get confused about whether it’s about the haystack, or the needle. Having a haystack for the heck of it isn’t usually what’s done. It’s for a purpose. It’s important to understand what part of that haystack is important for what part of your business. How up-to-date is it? How much can you trust the data. How much can you make real decisions from it. And frankly, who should have access to it. So much of the data we have today is sensitive, affected by privacy laws and other kinds of regulations. I think big data is appropriately a great term right now, but more importantly, it’s not just about big data, it’s about great data. How are you going to use it? And how it’s going to affect your business process.
Eric: You could go down into a rat hole if you’re chasing something and you’re not really sure what you’re going to do with it.
Marge: On the other hand, you can explore years of behavior and maybe come up with a great predictive model for what a new buying signal scoring engine could look like.
Q: One promise of big data is the ability to pull in data from so many sources. That would suggest a real need for you two to work together to ensure the quality and the integrity of the data. How do you collaborate on those issues?
Eric: There’s definitely a lot of work that has to be done working with the CMO and the marketing organization: To sit down and understand where’s this data coming from, what’s it going to be used for, and making sure you have the people and processing components. Especially with the level of complexity we have, with all the data coming in from so many sources, making sure that we really map that out, understand the data and what it looks like and what some of the challenges could be. So it’s partnering very closely with marketing to understand those processes, understand what they want to do with the data, and then putting the people, the processes and the technology in place so you can trust the data and have a single source of truth.
Marge: You hit the nail on the head with “people, process and technology.” Often, folks think of database quality or accuracy as being an IT problem. It’s a business problem. Most people know their business, they know what their data should look like. They know what revenue shapes should look like. What’s norm for the business. If the business people aren’t there from a governance standpoint, from a stewardship standpoint — literally saying “does this data make sense?” — without that partnership, forget it.
Gartner does a nice job of describing the digital landscape that marketers are facing today in its infographic below. In order to use technology as a differentiator, organizations need to get the most value from their data. The relationships between these technology is going to make the difference between organizations that gain a competitive advantage from their operations and the laggards.
[i] Gartner Research, December 20, 2013, “Market Trends: The Rising Importance of the Business Buyer – Fact of Fiction?” Derry N. Finkeldey
[ii] Gartner Research, December 20, 2013, “Market Trends: The Rising Importance of the Business Buyer – Fact of Fiction?” Derry N. Finkeldey
[iii] Gartner blog, January 25, 2013, “CMOs: Are You Cheating on Your CIO?”, Jennifer Beck, Vice President & Gartner Fellow
[iv] Gartner Research, September 12, 2013, “Survey Analysis: Big Data Adoption in 2013 Shows Substance Behind the Hype,” Lisa Kart, Nick Heudecker, Frank Buytendijk