Marketing chiefs and other line-of-business leaders are having
an increasingly big say in IT procurement. But because they don’t necessarily hold all the purse strings, they’re getting in the way of buying decisions.
The shift in the balance of power from CIOs to CMOs is
becoming an increasingly significant issue, because of differences in the agendas
of the two camps, according to a report from analyst firm TechMarketView.
“The problem is that while CMOs are gaining power they
have yet to take control of the budget. Suppliers report that this tension is
causing purchasing decisions to be delayed or cancelled,” analyst and
report author Angela Eager wrote.
CIOs are under unrelenting pressure to achieve closer
alignment with the business and identify areas that have competitive value, but
they continue to operate against a background drive for efficiency and cost
reduction, according to Eager’s report, ESAS Market Trends and Forecasts 2013.
CIOs are also wrestling with new ways of operating driven by
consumerisation, the cloud and mobile channels, as well as finding commercial value
in big data.
Meanwhile vendors are more frequently dealing direct with marketing
and other line-of-business managers, whose focus is on delivering what they see
as the right customer experience.
CMOs are increasingly making decisions about business
applications and extensions but they are “working from a different agenda,
cost and risk profile to the CIO – and are more open to additional spending”.
Opportunities for vendors
This division between the agendas may not only delay
decisions but could provide vendors with what Eager describes as
Although CMOs may not control the extended budget beyond, for
example, front-office applications, they represent a new channel that vendors
could exploit, where one purchasing decisions has expensive ramifications
elsewhere for the IT budget.
“Decisions made to improve the front end have
implications in the back office and at the application infrastructure level.
Suppliers report that £100,000 to £200,000 [$160,000 to $320,000] front-office projects have turned into
significantly bigger deals once the back-end changes – for example,
modernisation, integration – are factored in,” Eager said.
“For suppliers, brokering the relationship between CIO
and CMO will be a key factor in releasing budget.”