All you need to do to become a successful digital business is get your CIO and CMO to play nicely with each other and everything else will fall in to place. Or so it would appear from the seemingly endless supply of articles and surveys talking about the importance of the CIO-CMO relationship to digital transformation.
CMOs are leading digital initiatives in areas such as developing the online customer experience, using analytics to understand customer preferences and behaviour, and using social media to engage customers and build brand awareness. And there is no doubt that a good working relationship between the organisation’s CIO and CMO is key to the success of such initiatives.
But there is more to digital than marketing and there will be many digital initiatives that may not necessarily need the CMO to be involved to any significant extent, if at all. And even where the CMO is a key player, there will be other members of the C-suite who will also have significant roles in shaping and leading digital projects.
Lego recently announced that is was launching a new product line that will allow children to build structures in the real world and then transfer them to games in the virtual world by photographing them with a smartphone. So, for example, they can build a car using real Lego bricks, upload a photo of the car and then race it round a virtual track online. Taking this product and its associated digital service from the initial idea through to the launch and ongoing support would have involved many functions of the business in addition to marketing.
The fashion retailer Zara has developed the capability to take items from the catwalk to the shop in a matter of weeks. This involves predicting fashion trends and then manufacturing and shipping adequate volumes to each outlet in a short period of time. Zara also monitors sales by store and can use this data to analyse and understand customer preferences and how these vary by outlet. It then uses this information to run promotions on certain lines at certain locations to maximise sales. This combination of traditional manufacturing and retail processes combined with data collection and analytics requires collaboration across Zara’s supply chain, finance, pricing, IT and marketing functions.
Coca Cola has developed a mobile app that provides its sales staff with advice on how to configure a store display based on photos they take of the shop’s refrigerator, shelves and storeroom. The app also estimates stock levels from photos of the storeroom, which can be fed into the ERP system for replenishment planning. And GE has developed a wind turbine that constantly monitors data from its neighbouring turbines and uses that data to pitch its blades for highest efficiency.
These examples demonstrate the real potential of digital. They stretch far beyond social media initiatives, interactive websites and targeted online marketing campaigns. Designing, building and launching digital products and services usually involves multiple areas of the organisation working together to create something new and innovative. Being a digital business means being a joined-up business. Digital does not stop at functional boundaries; it flows through the organisation to create integrated offerings and a seamless customer experience.
But some business functions have not traditionally been involved with activities such as product development and support, service delivery and customer experience. But that is what being a truly digital business requires; functions, processes, systems, data, etc. that previously were never exposed to the customer may form part of a new offering that creates value for the customer and the organisation.
Successful digital businesses create digitally enabled products and services and they also transform the organisation to create entirely new business models and ways of working. Digital is about reinventing the organisation, looking at the business from the customer’s perspective and building an operating model, capabilities, processes and systems that are driven by customer needs.
And this is why the CIO-CMO theme and its implication that digital is primarily about and hence driven by marketing is misleading and potentially dangerous for CIOs. Focusing solely or even primarily on their relationship with the CMO may cause the CIO to be excluded from the broader scope of digital. As the rest of the organisation starts to think about the more fundamental and higher value initiatives that will shape the digital future of the business the CIO needs to be an integral part of the process, involved from the outset and playing a leading role. If their efforts and attention are solely focused on supporting the CMO then they may miss out on this opportunity.
Being a CIO in a digital business is as much about building and managing relationships across the C-suite as it is about the technology. CIOs need to use these relationships to collaborate with, and to influence and guide, their peers as they shape the broader digital agenda.
The CIO occupies a unique position within the organisation; no other C-suite role has the same end-to-end view of the business allowing them to gain an unparalleled understanding of the people, process and technology issues spanning the full business lifecycle. With the right type of CIO, the position becomes the natural focal point for defining and executing the broader digital agenda across the organisation. No other role is better placed to identify opportunities to join-up different parts of the organisation, reengineer processes and exploit technology to enable new ways of working and new offerings.
But they can only do this if they are engaged with all members of the C-suite and all areas of the business. CMOs are an important stakeholder in the digital business and CIOs should invest time in developing their relationship with the marketing function but this should not be at the expense of the relationships across the C-suite.