the CIO-CMO PartnershIP · motivations, enhance marketing efforts, improve customer service and demonstrate rOI. the CMO and CIO need to collaborate to fully derive value from these

CIO-CMO PartnershIPAn execut ive D iscuss ion

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sponsoreD by proDuceD by in pArtnership with

© Copyright all rights reserved, It World Canada, 2013

The CIO-CMO ParTnershIP: ExEcutivE Discussions

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FOrWardFollowing the Canadian Marketing Association’s publication of ‘1 + 1= 3: CMO & CIO Collaboration Best Practices that Drive Growth’, a report sponsored by IBM and for which the Conference Board of Canada provided strategic guidance, it was determined to build upon the key findings. Two executive roundtables were held to further discuss the evolving roles of the CIO and CMO and the collaboration needed between them to effectively build stronger brands, drive customer engagement, and deliver an excellent client experience.

We would like to thank each of the attendees for their participation and for openly sharing their experiences. While each of the participants identified themselves to be at different stages of collaboration, it was recognized that in order to succeed in today’s highly digitized environment, companies must not only connect with the customers but anticipate and even predict customer needs on an individual basis, and create customer-centric organizations.

OvervIeWthe explosive growth of consumer-generated content through social media combined with the proliferation of devices and channels has created an opportunity for organizations to better understand their customers and for CMOs to tailor marketing programs to the individual consumer. the advent of big data and the analytics that come with this present further opportunities to better connect with customers.

to realize these opportunities, a system of engagement must be put into place to collect the ‘right’ data, relevant to the organization and which informs decisions impacting business objectives and strategies for growth, corporate culture, and competitive differentiation.

all of this requires a new type of collaboration between Marketing and It — the CMO and CIO must jointly engage. Ultimately, this shift will redefine their roles, demand different skill sets and require organizations to adopt a customer-centric business culture that is authentically one with the brand.

a total of fourteen industry participants from diverse industry sectors participated in these executive roundtable discussions. as

FAcilitAtor:Shane Schickeditor-at-LargeIt World Canada

speciAl Guest: Bob HumphreysCountry Leaderdemand Programs and digital strategy IBM Canada

pArticipAnts: november 21, 2013Gary Davenportvice President Information systemsallstream

Kal Iraniassociate vice President MarketingMark’s

David Morellidirector, MarketingsickKids Foundation

Behz Nainivice PresidentInformation technology (CIO, Canada) Giesecke & devrient (G&d)

Sherif Shetadirector, Information technology - CanadaIt director, Commercial systems - Latin america & Canada, Baxter International

Colleen Vecsi, Vice PresidentMarketing and Communications Marsh Canada


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leading organizations where It and Marketing are currently working hand-in-hand to varying extents, the participants were able to share their experiences and insights and to reflect upon what lies ahead: how can further collaboration strengthen the brand and drive customer engagement? the discussion then focused on how CMOs and CIOs can collaborate as a means to:

• unlock new marketing opportunities by drawing deep insights from big data

• understand each customer as an individual• create a system of engagement that maximizes value creation

at every touch point• design a corporate culture and brand so they are authentically

one.

Big data can be an effective tool to gain insight into purchase motivations, enhance marketing efforts, improve customer service and demonstrate rOI. the CMO and CIO need to collaborate to fully derive value from these emerging opportunities.

settInG the staGe: the CMa stUdyearlier this year, the Canadian Marketing association (CMa) created a CMO-CIO task Force to define many of the leadership challenges associated in forging strong CMO-CIO partnerships. the task Force commissioned the Conference Board of Canada to undertake primary research to help define and select best practice examples of where successful collaboration is underway. the report, together with findings from roundtables held by IBM and subsequent research were used as a discussion guide – focusing questions on how the participant’s experiences support the trend: a need for a new CIO-CMO partnership to take business beyond meeting customer needs to predicting them and delivering on customized, individualized experiences.

On POIntthe following represent a sampling of responses to the questions posed by shane schick of It World Canada, who facilitated the two discussions.

pArticipAnts: December 5, 2013Carlos Palaciovice President Information technology and Chief Information Officerthe arthritis society

Evelyn Dempseynational director, Marketing and Business development McMillan LLP

Susan DonizGlobal CIO, aimia

Michael Linsenior vice President & CIO Morneau shepell

Ted MaulucciCIO, tridel Corp.

Dina Vardouniotisvice President and General Manager of Card Partnerships Chase Card servicesJ.P.Morgan Chase Bank na

Mike Yeatesdirector, service and Platform Management Governance CIBC

Alexis ZamkowGeneral Manager, data and targeting services Canada Post


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Q: What are your key business priorities at this time, whether they be IT focused, marketing focused or a combination of the two?

We need to figure out what’s truly valuable to our customers.— Gary Davenport, VP of IT, Allstream

attendees identified a wide range of priorities at their organizations. allstream’s Gary davenport said a top priority for his organization is to get value out of data, not just collect it. “We’re making progress,” said davenport, who is also president of the CIO association of Canada. extracting that value will require “a transformation in our business…including how we serve customers.”

It’s no surprise that privacy and data protection are top priorities for many organizations. at the arthritis society, “it’s a question of how to manage the data, what data to collect and understanding the value or relevance of it as well as the impact of Privacy legislation”, noted Carlos Palacio, vice President Information technology and Chief Information Officer. at Canada Post, the focus is on changing the business model from product delivery to customer service delivery – and integral to this is turning customer data into a competitive advantage. at Giesecke and devrient, the data question elevates to one of company culture. the company makes smart cards and special security paper used by governments and financial institutions (e.g. credit cards, passports, banknotes). In the move towards digital and big data, “the big challenge isn’t on the technology side but changing the mentality of the teams…to operate on a (customer) service provider model rather than a product development model,” said Behz naini, vP of It at the German firm’s Canadian division.

Kal Irani’s priority is “to capture share of mind” among customers at apparel retailer Mark’s, where he is associate vP of Marketing. While this requires the digitization of the retailer’s marketing strategy, one of the biggest challenges in that process has been “on the infrastructure side…leveraging POs to create a two-way conversation with customers.”

sherif sheta is the regional CIO for the Canadian division of Baxter International, which makes medical equipment and healthcare products. In some ways, Baxter is in front of the trend: it has three CMOs, one for each business product unit. and the firm has already created an analytical solution to reduce medication error rates. But Baxter sells to healthcare providers, not to actual patients. so sheta’s priority is figuring out “how do we engage the (individual) patients we cannot sell to?”

1. How important is it for the CMOs to partner with CIOs?

very important.

2. Is CMO CIO collaboration a common practice in Canada?

no it is not.

3. What needs to happen?

shift in mindset and focus to drive new capabilities in marketing.

4. Where to begin?

Bottom up: start small, build mo-mentum/credibility. top down: make digital central to enterprise.

the cmA stuDy FinDinGs:1 summAry questions & short Answers

Sherif ShetaDirector, InformationTechnology - Canada

IT Director, CommercialSystems - Latin America &

Canada, Baxter International

Kal IraniAssociate Vice President

MarketingMark’s


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Q: What defines “big data” in a marketing context and how is the need for increased analytics emerging in organizations around the table?

We use it to target the right people and segment our stakeholders … and tailor the content for that.— Sherif Sheta, Regional CIO (Canada), Baxter International

everyone at the table voiced the desire to use big data to mine deeper customer insights and develop individualized marketing. some progress is being made on that front. sheta explained that after Baxter identified key influencers among healthcare professionals in its market, it built a Web portal specifically for them. “then we follow their trail,” he said, by pinpointing variables like what brought visitors to the portal in the first place, which emails they open, how often, and when.”

there are still hurdles to overcome at this stage of the big data revolution, however. “One of the most daunting challenges is how do you manage all that data in your back office systems and transactional data,” added davenport. trying to unlock scores of data in legacy technology systems and make it available as a point of contact for sales people, call centre reps and many other staff is tough. this viewpoint seemed to be shared by all the participants as they voiced their concern that data integrity is key but that it is only the first step toward better understanding your clients and driving customer engagement.

david Morelli, director, Marketing at sickKids Foundation added that most organizations are better at tapping into the information they already have than creating new data targets. Why? the sheer volume of data makes it hard “to even discover what data you have,” he said. Colleen vesci, director of Marketing and Communications at Marsh Canada, commented that besides dealing with huge quantities of information, it can also be difficult to integrate old data with new.

Irani brought up the issue of how to effectively shift from a historical data approach to a predictive one. “a lot of our data is set on managing last month or last week. (there’s trouble) measuring forward. We’re struggling with the insight from that information”.

the question of data, where it comes from, how it is used, and how to ensure you are collecting the right data was debated at length among both groups of participants. as susan doniz, Global CIO of aimia commented, “for me, the big question is not only “what is possible now that we have a lot of information but what is

Findings from 1+1 = 3: CMO & CIO Collaboration Best Prac-tices that Drive Growth

• organizations lag behind con-sumers in engaging with the digital economy

• some organizations are rede-fining traditional CMO and CIO roles, even creating separate new C-level positions to over-see digital

• digital customer interface is best executed when marketing and It develop and resource those projects together

• digitization makes collecting customer data easy; it’s the analytical part that’s hard

• senior executives have not made big data a priority

• CMOs and CIOs today are more willing to learn about each other’s areas.

David MorelliDirector, Marketing

SickKids Foundation

Shane SchickEditor-at-Large

IT World Canada


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responsible and what does the company want us to do with that data vs what the customer wants us to do with it?”

Q: How has analytics provided a foundation for true omni-channel communication and relationship-building with customers and prospects on a one-to-one basis?

Personalized - that’s where it needs to go.— Bob Humphreys, IBM Canada

the main value in big data “is about the individualization of the conversation,” Irani stated. Getting to know the customer before marketing to them is key, added sheta: “you have to think about what’s in it for them. that’s where you can bring value to them, learning about the target audience.”

all participants agreed that individualized data will help cut down on the all-too-common practice of poorly targeted ‘spam’ style e-mail campaigns or costly mass market ad buys. “(We need) to get our marketing team to best leverage that data so we’re not polluting the world with emails. We’re not there yet – but we’re working on it,” said davenport.

vecsi noted that strategically shifting delivery channels can also help. When Marsh saw the number of e-mail blocks and unsubscribes climb, it cut back on e-mails and harnessed more social media channels instead, sending its engagement levels “skyrocketing.”

social media though is not the panacea for customer engagement. For the financial services industry, data analytics has resulted in re-visiting social media and re-thinking their go-to-market strategy. Mike yeates director, service and Platform Management, CIBC commented that “the whole idea of marketing the banks is changing rapidly and a huge shift is underway with real-time analytics. today, when a customer service representative looks up a customer’s account, they know exactly which products that customer already has. What our analytics taught us is that the marketing channels we thought were working aren’t actually the ones that are working the most – digital and social aren’t actually what we thought they were. Our analytics are focusing our efforts”.

humphreys touched on how analytics can enhance targeted marketing. “Based on a (consumer’s) search patterns, we can offer up messaging content based on where we think they are in the decision-making journey. now, all of a sudden, we become more relevant. and it’s absolutely doable.”

naini acknowledged that as big data becomes more personalized,

CMa recommendations (from 1+1=3: CMO & CIO Collaboration Best Practices that Drive Growth1)

Canadian organizations need to:

• adopt a customer centric culture, preferably flowing top down from the CeO

• manage the digital interface with customers predominantly through the marketing unit vs. the It stream

• invest long-term in big data capability such as data ware-houses and advanced analyti-cal software to extract meaning from data

• bring marketing and It together to communicate and innovate consistently

• make a senior marketing per-son responsible for establish-ing links between customer behaviours and marketing campaigns

• hire marketing people who are also technology savvy

• hire It people who are also business savvy and score high-ly in interpersonal skills


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new issues inevitably will emerge around customer privacy such as “Who owns the data and do we have the right to manipulate the data? do we need to get approval to use or sell that data?”

this point was also emphasized by dina vardouniotis, vP and General Manager of Card Partnerships, J.P. Morgan Chase Bank: “the data governance piece is probably the most important one that bridges It and Marketing. Legal compliance issues are also important but is truly incumbent upon Marketing to have a clear strategy on data, one that’s more holistic, and to start by wearing a compliance hat first, not just a goal focused tactical approach.” susan doniz added that “you have to remember marketing has to be done in a thoughtful way. Companies have to hire It people with business knowledge and Marketing people with technology skills and knowledge.”

Q: Who ‘owns’ the various pieces of the puzzle? And how can the CEO, senior management teams and even employees foster increased collaboration and effectiveness across the CIO and CMO functions?

It is a large opportunity — and a large issue. Because it’s so different from how organizations behave today.— Bob Humphreys, IBM Canada

In davenport’s estimation, data isn’t all you need; there has to be fundamental change within the organization itself. “We need to go through a transformation in our business. to do that, we need deep customer insights. But information is not enough.”

naini suggested the transformation hinges on adopting a customer-centric focus throughout the organization. his own firm is striving to become more customer and marketing focused rather than just innovation focused.

to make sure the value extracted from data is consistently meaningful to customers, It and Marketing must collaborate, noted Bob humphreys. It’s not an either - or proposition for the CMO and CIO. “they both have to have skin in the game.” sometimes one plays catch-up with the other. One guest commented that when it comes to adopting a personalized digital marketing approach at his firm, “I don’t feel It is evolving as fast as Marketing.”

humphreys suggested that fostering a customer-centric culture through CMO-CIO collaboration should flow top down from the CeO. he stressed that this model has more chance of succeeding because the CMO and CIO “may not have the political clout” to do it on their own. naini agreed that C-suite support is vital since budget

Marketing is now the central engine of growth for many

companies, — McLellan declared2.

Colleen Vecsi, Vice PresidentMarketing and Communications,

Marsh Canada

Gary DavenportVice President,

Information SystemsAllstream

Behz NainiVice President

Information Technology (CIO, Canada)

Bob HumphreysCountry Leader

Demand Programs and DigitalStrategy


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approval usually resides with head office anyway, in his case europe. Others such as evelyn dempsey, national director Marketing and Business development at McMillan commented on how important a role the CFO plays both as keeper of budgets and data (as it relates to billing). dina vardouniotis added that everything is just so new and changing so fast. “technology moves so fast today and is impacting how we market in a big way. you need the CeO and CFO to buy in conceptually because we often don’t have the data or reference points which we used to have with traditional marketing. By the time its figured out, we’ve already lost 60 percent of the eyeballs so a commitment to test and learn is critical.”

sheta and Irani pointed out, however, that a top down customer-centric strategy fails without bottom-up execution across the organization, from the social media team to the store manager and warehouse staff. “It’s not just It. the company infrastructure has to change,” sheta said.

this shift isn’t going to happen overnight. One guest said his firm is “very conservative” and resistant to trying new things. another said his company is slow to embrace the new digital reality: it finally put a social media policy in place for staff two years ago. and a third participant added that his efforts to pursue individualized digital marketing were met with outright opposition from the company president.

Change is often seen as a difficult undertaking and the catalyst for change in this instance has to the be joint efforts of the CIO and CMO. For ted Maulucci, CIO of tridel, the role of the CIO is clear: today, CIOs have to both understand the business and be in a position to understand the ‘opportunity’ cost of any It spend. they need to ensure alignment to the company’s strategy and to prioritize on important business issues. stonger metrics are also required in order to present effective business cases, but that can be difficult, particularly when you are dealing with the unproven strategies.

Others though have already started down this path. at Canada Post, a cross-functional committee consisting of Legal, hr, It, and Marketing was formed to look at the question of data protection, privacy, how to use it and to establish a common framework. “With this in place, we are now all speaking the same language and educating each other about each unit’s needs and challenges”, noted alexis Zamkow, General Manager, data and targeting. “this really allowed everyone to share in the strategy and elevated data governance at Canada Post as an issue and priority.”yet other organizations are taking brave, critical steps to rethink the CIO-CMO roles and responsibilities. Baxter actually created a new unit within It designed to be “agile and separate” from its traditional

GArtner’s ForecAstGartner Group analyst Laura McLellan made headlines in 2012 with her prediction that by 2017, CMOs will spend more on It than CIOs. to bolster her forecast, McLellan cited Gartner research showing that marketing budgets are expected to grow twice as fast as It budgets. she also noted that in 2011, B2B and B2C marketing budgets were set nearly three times higher than It budgets. additional Gartner data suggest that 30 per cent of marketing related technology and services are already purchased by market-ing – not It. 3

Dina VardouniotisVice President and General

Manager of Card Partnerships, Chase Card Services

J.P.Morgan Chase Bank NA

Ted MaulucciCIO, Tridel Corp.


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It group. the new unit works closely with Marketing and sales “all the time, so they become one and the same,” sheta said. naini said similar gains are likely if Marketing hires people who are more tech savvy and It recruits technical talent with more business skills.

as the executive roundtable discussion wrapped up, each of the participants commented on the change that lies ahead for both Marketing and It. these include requiring new and complementary skills sets, and renewed emphasis on building customer-centric organizations and the culture that supports this, as well as new thinking around data and analytics and how they can be used to create a “system of engagement that maximizes value at every touch point”.

taKeaWays

• Big data analytics creates new opportunities for marketing to become more individualized and relevant to each customer.

• Collecting data is not as challenging as deriving meaning from it for customers.

• shifting from a historical data approach to a predictive one remains challenging.

• While some aspects of these challenges are technology-based, others are deeply rooted in organizational culture.

• a customer centric approach must be embedded throughout the entire culture of organizations to maximize opportunities emerging from big data.

• CMOs and CIOs must collaborate regularly and become active stakeholders in all aspects of digital marketing.

• CMO-CIO collaboration and customer-centric marketing should be embraced top down starting with the CeO.

• the collaborative and customer-centric approach must also be executed bottom-up by all units of the organization.

• hiring It talent with business and interpersonal strengths will make collaboration easier, as will hiring Marketing people with deeper technical knowledge.

• Creating new positions outside of CMO or CIO to oversee digital marketing and strategy can complement the collaboration between Marketing and It.

• although big data presents some new challenges for organizations, it also creates more opportunities than ever before to: learn about customers; engage them through personalized

the Disconnect Gartner research predicts that by 2017 the CMO will spend more on It than the CIO. Marketing is purchasing significant market-ing-related technology and services from their own capital and expense budgets – both outside the control of the internal It organization and in conjunction with them. the research also found that forty-one percent of CMOs believe they are aligned with their It counterparts, while 39 per-cent of CIOs believe they are aligned with Marketing counterparts.3

Carlos PalacioVice President Information

Technology and Chief Information Officer, The Arthritis Society

Alexis ZamkowGeneral Manager, Data and

Targeting Services, Canada Post

Susan DonizGlobal CIO, Aimia


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content; drive and measure marketing rOI.

aBOUt IBM CanadaFor over a century, IBM Canada has played a key role in the history of IBM Corp., the world’s largest It and consulting services company. Operating in over 170 countries, IBM is a global business and technology leader, innovating in research and development to shape the future of society at large.

IBM Canada is a driving force in Canada’s It and business services sectors. It attracts highly skilled talent, generates $1.6 billion in exports annually, spends $540 million a year on r&d, and contributed $4.5 million and 125,000 hours in employee volunteerism to charitable causes last year. In 2012 alone, IBM Canada invested more than $165 million in data centre expansion. IBM Canada is also responsible for IBM operations in some 24 countries located between Bermuda and suriname.

aBOUt BOB hUMPhreysCountry Leader, Digital Strategy and Demand ProgramsIBM Canada

Bob humphreys has an impressive 20-year track record of leading marketing teams across IBM and the packaged goods industry. In his current role at IBM Canada, he is responsible for driving the business pipeline across all of IBM’s lines of business. his most recent focus is the application of predictive analytics and big data to help optimize and transform how his own team generates marketing yield.

In addition to his IBM duties, humphreys chairs the CMO-CIO Collaboration task Force at the Canadian Marketing association. he is an accomplished and sought after public speaker who has also been featured in several media reports. eric siegel’s book Predictive analytics: the Power to Predict Who will Click, Buy, Lie or die references humphreys in regards to IBM’s use of advanced analytics.

Michael LinSenior Vice President & CIO,

Morneau Shepell

Evelyn DempseyNational Director, Marketing andBusiness Development, McMillan

LLP

Mike YeatesDirector, Service and Platform

Management Governance, CIBC


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aBOUt It WOrLdFor almost three decades It World Canada has been building solid relationships with Canada’s It professionals by delivering timely, incisive information that helps them succeed in their jobs. today, more than 75,000 It executives and professionals – representing 70 per cent of the buying power in Canada – turn to It World Canada for the information they trust.

It World Canada is a privately-owned company and the Canadian affiliate of International data Group (IdG), the world’s largest It information provider. IdG publishes more than 300 publications worldwide. IdG also provides It market analysis through 49 offices in 85 countries worldwide. One hundred million people read one or more IdG publications each month.

aBOUt shane sChICKshane schick tells stories that help people create value with information technology. he is a technology columnist with yahoo Canada, the editor of CommerceLab, an editor-at-large with It World Canada, the editor of allstream’s expertIP online community and the editor of a U.s. magazine about mobile apps called Fiercedeveloper. shane was previously It World Canada’s vice-President, Content & Community (editor-in-Chief), leading a digital-first strategy that included a transition from print publications to online portals and magazines. shane regularly speaks to CIOs and It managers at events across Canada about how they can contribute to organizational success, and comments on technology trends as a guest on CBC, Bnn, Ctv and other programs. a former columnist with the Globe and Mail, shane has been recognized for journalistic excellence by the Canadian advanced technology alliance and the Canadian Online Publishing awards, where he has also served as a judge.

endnOtes1 Canadian Marketing association “1+1=3: CMO+CIO Collaboration Best Practises that drive Growth”. June, 2013

2 Jeff vance, “does the rise of the CMO threaten CIOs?”, CIO, Oct. 22, 2012.

3 Lisa arthur, “Five years from now, CMOs will spend more on It than CIOs do,” Forbes, Feb. 8, 2012.

The CIO-CMO Partnership Executive Discussion, November 21, 2013

The CIO-CMO Partnership Executive Discussion,

December 5, 2013

the CIO-CMO PartnershIP · motivations, enhance marketing efforts, improve customer service and demonstrate rOI. the CMO and CIO need to collaborate to fully derive value from these

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