CIO vs CMO in the War for Mobile


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Kinvey's ebook, "CIO vs CMO in the War for Mobile" unpacks the benefits and drawbacks of a marketing-driven mobile strategy versus an IT-driven program. And it's full of tips from global enterprises and start-ups alike.

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CIO vs CMO in the War for Mobile

  1. 1. Where is the branded equivalent of Snapchat? Where is the enterpriseversion of the vanishing-photo app with which iPhone users sent overone billion vanishing photos in just one year? We ask this not becausebrands should be in the business of sexting, but because, five yearsafter the launch of the Apple App Store, the watershed moment thatgave business entrée to the defining gadget of the 21St century, theenterprise has yet to really crack the code on mobile development.Snapchat. Instagram. Words With Friends. Draw Something. What’sApp. It seems like a new app goes viral every week, giving somepreviously unknown dudes in co-op workspace a valuation beyondtheir wildest dreams. For brands trying to figure out the mobile space,the opposite has been true. Despite entering the mobile game withmassive consumer awareness and trust, big companies have had adifficult time getting consumers to welcome them on to their Androidand iOS devices.Back in 2011, Deloitte found that 80 percent of branded appsstruggled to get even 1,000 downloads. That was a grim headline for 1
  2. 2. mobile marketing operations and, over time, there’s not much tosuggest things have changed. Breakout branded apps—and we’reexcluding those created by media companies that have an unfair legup over marketers of dog food and insurance policies—are still fewand far between. How many do you download only to delete them aday later when it comes up short on form or functionality? You know,the airline app that won’t allow you to book a flight; the rental car app that’s just a link to the company website that—curses!—isn’t optimized for mobile and won’t remember your 23-digit user number; the diaper brand doohickey that doesn’t do, well, anything. Can you name five 127 Downloads branded apps you use regularly? 286 1,023,068 How about three—and we’ll spot you Nike and Starbucks? The Downloads Downloads same goes for apps developed for employees. The app stores arelittered with poorly-reviewed and little-used apps that were meant tohelp out folks who take orders, make sales, and generally keep theenterprise rolling.The point is this: For even the most sophisticated companies, mobileapp strategy remains a work in progress. Big budgets, flashy agenciesand development shops, and enormous amounts of customer data allhave done little to make a dent in the consumer apathy. What’s toblame? Well, you have to remember the mobile revolution is only fiveyears in the making. It naturally takes enterprises some time to figureout the realm of the possible and then make it happen.But let’s not let enterprises totally off the hook. It’s fair to say that toomany have tripped over their own feet as they’ve struggled to organizearound mobile. A case in point is lingering ambiguity around a centralorganizational question: Who should own mobile app strategy? TheCMO, served by an increasingly left-brained marketing department 2
  3. 3. and an ever growing array of agencies? Or should the CIO, the tradi-tional buyer of technology and maintainer of servers and intranet, rulethe roost?That’s the question we’ve asked anumber of leading thinkers toponder in this eBook. The answermatters in no small part becausemarketing and IT come with two verydifferent sets of baggage. If eitherside is to win the mobile game they’ll Ohave to change and become more Cmlike the other. CIOOur book’s structure is simple. Firstwe’ll discuss the respective cases for the CMO, and CIO beforeconcluding with some ways that eschew those legacy power struggles.The case study there is a company you might have heard of—Walmart.We begin our study with the C-suite denizen who at this momenttime—and if you blink, it might change—seems to be sitting in thecatbird seat. 3
  4. 4. When we caught up with Amy Kavanaugh in early March, the VP-publicaffairs and engagement at Taco Bell was still in the whirlwind of a newproduct launch. The lustily-awaited Cool Ranch Doritos Locos Taco hadarrived in stores a day later than expected and the fast food equiva-lent of a riot erupted around the internet. The new menu item is thenext beefy/cheesy chapter in what’s turning out to be a storybookmarriage between Taco Bell and Frito Lay. It’s already yielded theDoritos Locos taco, an historic product launch that sold at a rate ofalmost one million per day in 2012. Riding its spicy shell, the YumBrands brand has become the fast feeder to watch as it plans to open2,000 new restaurants over the next decade. Things are moving <em>muy rapido</em> at Taco Bell and the mobile experience is no excep-tion.“Agile is our middle name,” said Kavanaugh, referring to the projectdevelopment methodology preferred by many top software compa-nies and, increasingly, on corporate campuses far from Silicon Valley.Taco Bell, which offers a fairly basic app with store locator and gift 4
  5. 5. card functionality as well as menu and nutritional informational, isnow in preliminary testing of a mobile ordering experience and hasjust signed an agreement with Cardfree, the mobile merchantplatform. Why? Mobile ordering is what the consumer wants and TacoBell, according to Kavanaugh, has made the shift from an advertising-led company to an insights-led one. “Suddenly they’re makingThat shift means one thing for software—a long way from themobile app strategy. “If you’redriving an insights brand and days when marketing was allresponding to and co-creating about outsourcing adexperience with consumers and campaigns to Madison Aveidentifying their needs, then thisis a function that should sit in agencies. ”marketing.”Kavanaugh is part of a growingchorus that favors a marketing-led mobile app strategy. Market-ters, the argument goes, own the consumer insights and the brand experience, and therefore should oversee the increasingly important mobile app channel. But bearing this responsibility augurs a new reality for marketing departments. They have to become more tech-savvy and comfortable with building and maintaining a rigorous development roadmap. Suddenly they’re making software—a long way from the days when marketing was all about outsourcing ad campaigns to Madison Ave agencies.“When I started in marketing, it was the arts and crafts department,”said Brian Kardon, CMO of Lattice Engines, which offers big dataanalytics for sales and marketing departments. “We did the logos, thecolors of the website, the branding. Now it’s all left brain. Everyone onmy team is a digital native. They know about HTML, search, how tobuild an app. Increasingly in bigger companies you have marketingtechnologists embedded.” 5
  6. 6. The rise of the marketing technologist—or creative technologist inmany an agency’s lingo—shows just how far we’ve come in blurringthe lines between what used to be two very distinct departments,skillsets, and worldviews. The marketing department needs peoplewho get tech—and vice versa. Scott Brinker, CTO at Ion Interactive and proprietor of the ChiefMarTech blog, has been studying this dynamic for years. He believes that “market- ing has to own the experience and to do that they have to take responsib- lility for the technology.” It’s logical that marketing is respon- sible for mobile app strategy, but this comes with a caveat that echoes throughout many of the otherconversations we had. Marketers have to earn it by really immersingtheir organizations in technology.“I don’t think it works when marketing sketches out the experienceand throws it over the fence for IT or some third party to build,” hesaid. “Marketing folks don’t even know what’s possible with the tech-nology just as tech folks might not understand how it impacts experi-ence. You need someone on the team who speaks both languages.”Who marketers partner with is another important factor in howsuccessful they’ll be in owning mobile. Forrester analyst MichaelFacemire observed that the digital agencies once best known fordesign acumen are getting better at working with backend technology,helping apps with sharply-designed front ends add more functionalityand value through connections with the vast amounts of data presentin the enterprise. The association could help CMOs gain tech credibil-ity.“The CMO is trying to branch out and not just be about pretty pictures 6
  7. 7. anymore,” Facemire said. “I can reach out and work with folks whohave technical chops, who are not just pretty-picture guys but canwork with back-end systems as well. This can become a commonground.”Another common ground can be Agile development, the projectmanagement philosophy that may end up being the Esperanto of aproperly integrated marketing-tech world, only, unlike Espe- “Adopting Agile is part anderanto, people actually use it. parcel of the changes that haveAt Mindjet, the San Francisco- washed over the marketingbased creator of work manage- business...”ement software, the marketingdepartment has adopted aversion of Agile that has themoperating in three-week sprints.“When we sit down with anengineering team, we’re moreeffective because we all speak thesame language,” said Mindjet CMO Jascha Kaykas-Wolff.Adopting Agile is part and parcel of the changes that have washedover the marketing business that as for decades acclimated to longplanning cycles and communications strategies that were hatchedbehind closed doors and shoved out into the world with little if anyroom adapting to customer feedback.Agile is about fast sprints, testing and learning, iterating and reiterat-ing. Said Kaykas-Wolff, “The idea of having a big campaign, pumping abunch of media against and then pulling it down six months laterdoesn’t really work. You have to operate differently and one of themodels to pull from is software deployment.”To his mind, marketers shouldn’t be automatically handed responsibil-ity for mobile. They have to earn it by educating themselves and 7
  8. 8. showing that they get how software is made rather than try importantways of thinking and doing from old marketing models.“If you approach mobile strategy like its a bunch of campaigns you’redestined for failure. You have to be empathetic to how you developand deploy software. If youre not, then youre in a horrible position toraise your hand to take over mobile strategy.”Until about eight months ago, Mindjet’s mobile operations was led bythe product team. Now it’s organized by a steering committee formobile comprised of a number of senior executives including the headof product and Kaykas-Wolff. Injecting marketing and other functionsinto the mobile development process ensured that Mindjet began tobetter focus on its paying customers and even led to a new product.Over time, Kaykas-Wolff said marketing may end up owning appstrategy. Or it may not. In any event, ownership doesn’t precludecollaboration with other parts of the enterprise, least of all IT. And, nomatter the organization, there are things that IT just does better.“There are requirements in terms of privacy protection and security-things that I would have no business being involved in,” Kavanaugh said. “They are important for brand and consumer protection. That is driven by the back-end, a really strong IT team and partnership.” 8
  9. 9. There’s good news and bad news for the CIO who wants to ownmobile strategy. Let’s get the bad news out of the way.Mobile success requires speed and openness to a more iterative wayof doing things. With mobile, you’re constantly issuing updates,optimizing, perfecting and innovating. Unfortunately, CIOs and the ITorganizations they oversee are historical symbols of corporate slow-ness. You don’t look to IT for innovation. You look to IT to keep thingsup and running.“The office of the CIO was never thought of as an innovation center,”said Facemire, of Forrester. “It’s been perceived as a cost centerhoping to get stuff done at a containable cost.”This is a perception that, rightly or wrongly, has lingered. Most peoplewe talked to don’t think that your average CIO is cut out for the job, anumber that includes some of their own. 9
  10. 10. “Im heavily biased that the marketer should own it,” said Jim O’Neill,CIO of HubSpot, a marketing SaaS company based in Cambridge,Mass. “IT is there to help the business. IT should help with the build-out or with sourcing the engineering development, but only at the direction of the CMO. The legacy power struggles need to go away. Here’s the good news. There are indications that CIOs are taking on a broader role within their organiza- tions, that they are no longer mere shepherds of a just-say-slow IT department. A 2012 survey from Gartner captured the change roiling this geeky corner of the C-suite. Seventy-seven percent of CIOs interviewed said they have responsi- bilities beyond IT, compared to just50 percent four years before. IT management, until recently the be-alland end-all of the job, now ranks a paltry sixth on a list of prioritiesthat’s topped by analytics and business intelligence and mobile tech-nologies. Sure, CIOs are still called upon to oversee security, virtualiza-tion, CRM and legacy modernization, but they’re increasingly taskedwith building new channels and markets.Chris Silva, an analyst at Altimeter Group, breaks the recent history ofthe CIO role into three phases. In the first, the CIO intensely focusedon his own backlog and lost track of what consumers were doingtech-wise. This was followed by a period of disintermediation duringwhich enterprises went with line of business-led initiatives that oftenended up with purchases off-the-shelf solutions. We’re just entering athird phase that’s a result of dissatisfaction of those solutions. Andwe’re playing catch up to consumers.“I havent been able to quantify this in data points, but over the pastsix months or so the tide is shifting back toward the CIO,” Silva told us.“CIOs are caught up. They know what’s needed: building platforms 10
  11. 11. across the organization so that everyone can benefit from mobile in away that’s consistent and fully funded and resourced.”Facemire said this is changinghow CIOs think of their jobs. “The “With the number of mobileCIO,” he said, “is trying to pivot devices set to exceed theand become the chief digitalofficer and become the center of world’s population, we’re notnot only information but of digital going out on a limb in sayinginteraction.” that understanding mobile is aAnd of course there’s no way to key part of the CIO’s future”think of digital interaction withoutthinking of mobile. With thenumber of mobile devices set toexceed the world’s population,we’re not going out on a limb insaying that understanding mobileis a key part of the CIO’s future.But how can he or she put an elbow to the ribs of the CMO humble-bragging about how he owns consumer insights and user experience?The CIO does hold one card here: the employee. It’s important to notforget that an important user base for apps is to be found in theworkforce and the CIO has, for a long time now, been charged withdesigning a technology experience just for that audience. As workersof all kinds—from salespeople to community managers to waiters-get more mobile, they need devices that combine the friendly interaceof a consumer product with the back-end functionality that allowsthem to dip into enterprise systems where necessary.Happily, the CIO has already been trying to make this marriagehappen as he confronts the consumerization of IT, which, put simply,means what technology an employee uses in the workplace will beinformed by the choices he makes as a consumer. Although you mightissue staff a Blackberry, Dell Inspiron and an Outlook account, 11
  12. 12. employees are actually using an Android, an iPad and Gmail. It’s atrend that has any number of implications for HR, IT and legal depart-ments. One effect of the Bring Your Own Device phenomenon is thatit’s forced CIOs to better understand how workforces use technologyand that’s a good first step to understanding what consumers aredoing. It’s given topics like good design and usability a higher profile. Another advantage that CIOs also “IT shouldn’t give up on metrics bring is a different mindset to bear when it comes to metrics. In like security or process support the worst cases, marketers can simply to serve marketers’ get snagged on soft but sexy metrics” metrics—say the number of reviews and stars in the App Store—and lose sight of bigger questions. “IT shouldnt give up on metrics like security or process support simply to serve marketersmetrics,” said Altimeter’s Silva. “You can take great expertise fromserving customers and use 90 percent of that, but serving customers isprobably going to be different from serving folks internally. Are yousolving a user problem? If youre not or youre not focused on that,youre wasting your time and your money.”Among the keys to success for the CIO, according to one informationchief who prefers to remain anonymous, is not leading with technol-ogy and speaking the language of business objectives. Hiring IT peoplewith broad technology stack knowledge who can sit comfortably nextto marketing and design people on cross-functional teams alsohelps—as does a mindset that allows innovation to flourish through-out the organization.Even an empowered CIO is faced with an unfortunate reality: nomatter how expansively you view your role, a good chunk of the job is 12
  13. 13. about keeping the operation running and managing an endless projectlist. To a degree, this CIO remains a service provider who doesn’twholly control her own agenda. Innovation is often far down the listunless there’s a budget set aside for it. But that doesn’t mean innova-tion isn’t going on elsewhere in the organization—in other corporatefunctions or at the business units. When that happens, what’s a CIO todo? Snuff it out and stay true to a command-and-control notion of ITor let so-called shadow IT bloom?The answer to some degree is a barometer of how well this CIO is cutout to run mobile app strategy and other operations that are inher-ently forward-thinking.“Fighting this sort of shadow IT is not a prescription for success,” saidour anonymous CIO. “I allow it to thrive and allow seedlings to hatchout in the business units. It’s an effective backdoor way for me to fundand create innovation. I don’t blow the whistle, or stomp my feet. Inurture it and advocate for it. Ultimately thats going to come back tome. It will come under my ownership. I’m better served in leading frombehind.” 13
  14. 14. Ben Galbraith laughed lightly as he states his position on our CMO-CIOquestion.“Im an engineer by background, so my response is predictable,” saidthe VP-global products at “I struggle to see why giving amarketing guy control over a software product makes any sense atall.”After dismantling our entire thesis, Galbraith was kind enough to walkthrough the logic with us. It kind of felt like making a guy used todriving a Porsche take your pre-owned Hyundai out for a test spin. Yousee, Walmart does things differently than most Fortune 100 whoseroots aren’t in technology. A company that began in the final year ofthe Second World War has made itself into a tech player, establishingWalmart Global eCommerce, which in the company’s own words“combines the small structure and nimble nature of a startup with theresources of the world’s largest retailer.” In short, Global eCommercesupplies the ginormous retailer’s business units with softwaresolutions. You’ve probably read about Walmart Labs, the incubator 14
  15. 15. behind innovations like Polaris, the company’s own search engine.“We’re very much a software technology operation,” Galbraith said,making a crucial observation. Fashioning yourself a software companymeans you’re relentlessly focused on innovation and, rather than worry about old organizational silos, you’re keeping the consumer at the center of things. It also means that discussion around how legacy roles Acme can be updated doesn’t much apply. C “For us,” Galbraith said, “the notion of marketing people owning the software is ridiculous but its as BEFORE AFTER ridiculous as the IT people owning the software.”So the CMO or CIO question is no longer really a relevant one, thoughas recently as two years ago it might have been because Walmart.comhad fewer product people in its ranks. Now, he said, “the answer tothe question on both sides is no. We need someone whos focused onend-to-end customer experience. For us its actually two people. Onewhos focused on it from a business perspective and one whosfocused on it from a product perspective.”Asked whether this sort of thing is feasible for companies smaller thanWalmart–which is to say almost every company in the world–Galbraithacknowledged the efficiencies that Walmart gets from itsglobal girth. It’s easier to amortize the R&D when you’re a globalplayer. Before you sniff that what’s good for Bentonville can’t helpyour own 25-person shop, remember that there are still lessons herethat are universally applicable. The first is that laser focus on thecustomer and her needs and desires. The second is putting softwarepeople in charge of software development. This is what is reallybehind those calls for more a technologically-savvy marketing depart-ment. 15
  16. 16. In the final analysis, it may end up that Walmart’s experience is morewidely applicable than you might think. That’s not to say your small ormedium enterprise is going to find a pot of gold that will allow you toplow untold millions into proprietary software development. Even ifyou’re still buying off-the-shelf—something Galbraith said Walmartwould do more of if only off-the-shelf was better—there’s a point to bemade here. In the end, neither marketing nor tech has to end upowning mobile. It is not preordained. And a lot of companies aretalking about cross-functional constructions that include not only themarketing and tech but also legal, HR and other functions where needbe.“The CIO and the CMO are in the best case ceding their power in equalamounts to a center of excellence that is comprised of resources fromboth shops, ideally, that is leading mobile throughout the organiza-tion,” said Altimeter’s Chris Silva. “They’re doing the work and acting asa tiger team, asking how do we make sure were doing it right and howare we cross-pollinating what were doing on the inside? Theyverealized building the wheel five times doesnt help anybody.”Perhaps the CIO vs. CMO smackdown shouldn’t be a smackdown at all.“You’ve got to take the versus out,” said Taco Bell’s Kavanaugh, speak-ing like a true purveyor of Doritos-Taco Bell mash-ups. “Nothing worksin isolation anymore.” 16
  17. 17. Written by: Matt Creamer is a writer and editor based in New York City. He has written for Ad Age, where he is editor at large, The Awl, The Atlantic, the New York Daily News, The New York Observer and other publica- tions. He tweets at @matt_creamer. Designed by: Jake McKibben & Miguel Gaydosh What is Kinvey? Kinvey makes a fully-featured Backend as aService solution, offering 3rd party data integrations, multi-platform support, push notifications, and custom business logic on aplatform where its free to get started and you only pay when your app is successful. Build your backend today