The marketing department of a mid-sized U.S. company wanted to set up a website for their marketing campaign and asked the IT department for the necessary resources. In their plans, the site featured lots of activities and attracted a large number of visitors.
As usual, server resources and disk space were in short supply. The IT department couldn’t help marketing unless it bought new hardware for the campaign.
Unfortunately, the IT department’s budget was running low. At best, they could deliver the requested resources in a couple of months.
Businesses that provided cloud services had already entered the market. Their server capacity was easy to purchase online. The marketing department had already allocated funds for the campaign and set the schedules, so they decided to
proceed this faster way.
The campaign was very successful. So successful that the cloud service became a part of the production environment and was used increasingly.
At some point, the marketing manager left the company – a common occurrence. The marketing manager had purchased the cloud service with a company credit card. The credit card was cancelled in due course when the manager left. As the monthly payments to the cloud service provider stopped, the provider shut down the company’s cloud resources. Suddenly and without any warning, a part of the company’s production environment disappeared.
In 2012, Gartner’s analyst Laura McLellan forecasted that in 2017, marketing managers (or CMOs) will spend more money on IT than CIOs. The story above contains an element that proves she is on the right track: Now that cloud services are readily available, they are easy and fast to buy – and inexpensive. In addition, marketing departments need more IT resources because marketing is moving more and more into digital channels.
Marketing has always taken place where the crowds are. Earlier it took place at market places, today in social media. Most companies have an account, for example, on Facebook, Twitter, or Google+. In social media, they tell their marketing story, run campaigns, and so on. This means that they are already using cloud services in the truest sense of the word.
What lessons can be learned from this story?
This story is often told to CIOs as an example of the new kind of competition: If a company’s IT department can’t support business operations in the required manner and speed, other departments may purchase the resources they need from an external cloud environment. This results in a shadow IT that is out of the IT department’s control.
The lesson to be learned for marketing departments is that as buyers of IT solutions, they must assume the responsibility of using the cloud service and treat it as a production process. This may be somewhat foreign to marketing professionals.
The fact that marketing budgets are growing faster than IT budgets – and that the digitization of marketing is directing a part of that budget into IT acquisitions – is generally seen as confirmation of McLellan’s forecast.
The digitization of marketing also enables companies to carry out better and more accurate marketing analyses, which helps them to target and time their marketing efforts. However, companies must also buy and manage new IT solutions to make good use of the massive amount of data produced by the analyses.
I’d say that the current trend of using IT budgets is taking us in the right direction. IT is just a tool that enables production in a company. A carpenter knows which hammer is best and how it should be used to produce the best results. A hammer management and procurement organization couldn’t tell him that.
In much the same fashion, a marketing professional should know which tools produce the best results. The new role of marketing and the CMO is to purchase, maintain, and administer IT solutions, partners, and even IT projects.
Customer experiences are the driving force behind marketing. They are equally important whether in an online store, a marketing campaign, or meeting a salesperson in a store outlet. The customer experience should always be as good as possible.
Flexibility and agility are among the advantages of cloud services. Available resources and costs can be scaled up or down according to business needs, without large investments up front. At their best, cloud services work like a temp company in a supermarket, providing the supermarket with extra cashiers during rush hours when they are actually needed, and the supermarket doesn’t have to hire extra full-time cashiers.
As the world changes, the IT department could change into an IT online store of sorts, where customers (e.g. the marketing dept.) purchase services that best suit their needs, regardless of the origin of those services. The IT department
could add external cloud services to its service range, or produce such services from a private cloud.