Not So Fast, CMOs: CIOs Still Controlling IT Spending
In the past decade we have seen the rise in influence of the chief financial officer (CFO) when it comes to IT spending and directives, and even more recently it appears the chief marketing officer (CMO) has become more involved. So where does this leave the chief information officer (CIO)?
There is no argument that the CMO’s role has become more integrated into all big, companywide decisions. This rings true specifically when it comes to technology decisions, as marketing is leveraging IT more and more to create highly comprehensive, targeted campaigns that drive better brand awareness, align with thought leadership and create lead generation.
But just how much influence or control do CMOs now have over technology spending in their companies? It appears as though it's not as much as most would have thought.
CMOs are taking on a larger role when it comes to influencing business technology purchase and deployment decisions; however, CIOs still are the majority stakeholders of the budget, according to a recent report by Forrester. In fact, business-only IT spending accounts for only about 6 percent of U.S. new technology purchases, and rising only modestly toward 7 percent.
Further, the report states that about 10 percent of new IT purchases in the United States may start out at the business unit level but quickly shifts to the CIO. This shows that even when tech spending is being generated by lines of business, the CIO still has a say as to where and how much will be spent.
However, as marketing continues to become more integrated and valuable to organizations, its influence will continue to grow as well, as more companies move toward a collaborative approach when it comes to IT spending. More than 33 percent of new U.S. tech purchases will be made by the CIO and business together, according to Forrester. Also, CIO-team-led purchases that involve business unites will decrease slightly to 25 percent this year, from 27 percent in 2010.
Even though CIOs still retain the greatest influence over tech spending, IT cannot operate in a silo. Gartner states that IT-only purchases will fall from 27 percent in 2013 to 22 percent in 2014.
Solution providers will show their worth depending on their sphere of influence. Having a relationship with the CIO and IT directors no longer is enough. It is important to get face time with all C-level executives to get buy in going forward, which includes the CFO and CMO.
One could argue that even
One could argue that even when put in front of a non-IT stakeholder (i.e. CFO, COO, CMO), the sales rep has no clue what to say other than a generic superfluous mission statement that has no bearing on what the executive does.
Vendors needs to prep channel partners much better to prepare talk tracks and value statements that are business-led, rather than technology led (hello HP…)
I’ve seen a couple of
I’ve seen a couple of articles around this Forrester study and it’s not exactly reflecting what I’ve seen out in the field. Given the broader macroeconomic environment of the past years, I’ve noticed there are more controls on purchasing. With that, I would conclude that CIOs have actually been gaining more control over IT spending.
In general, IT needs to understand what the business needs. The business needs to make the case for what they need from finance in order to fund the work of IT. And contracts needs to execute the procurement. Once this collaboration is in place, we’ll no longer have to “give up” control of IT spending to various business units.
-Michael Wright, Vice President, Borland North America Sales, Micro Focus