Is the Gartner claim that by 2017 the CMO will spend more on IT than the CIO plausible?
Answer by Nauman Noor:
I don’t work for Gartner nor am affiliated with them in any manner. I do feel though that directionally the statement is quite believable once you consider three key aspects:
1. What is being CMO spend being compared against
If you were to review the spend in most IT organizations, a good 60-70% (if not a bit more) is dedicated to keeping things running (e.g., data center operations, electricity, leases on infrastructure, etc.). Another 10% - 15% is typically dedicated to bug fixes, maintenance and general support.
That leaves 15-30% of the budget on providing new capabilities - discretionary spend in some ways. That then has to be divvied up across the various business areas and ofcourse, some at making IT function better.
Gartner’s projection is focused on purchase of new technologies and services by CMOs. In terms of an apples to apples comparison, it would be fair to compare and contrast this against discretionary spend.
2. What is included in the CMO technology spend
Gartner’s classification has more than just servers and analytics when it comes to CMOs and technology. It includes SEO tools, social media platforms, e-commerce and a variety of other things (see: ). They are predicting that with the adoption of SaaS, CMOs will increasingly engage the providers directly versus relying on their inhouse IT counterparts. For instance, one can leverage Amazon for hosting the ecommerce site and fulfillment of orders as well.
3. Overall industry or segment specific
Spending on IT does vary by industry, just as marketing spending does as well. So there will be sectors / segments where marketing spend is nominal (e.g., OEM manufacturers) while others will spend less on IT (e.g., retailers, restaurants, food services). I believe that the projections are at an aggregate level.
As with any projection, the variance is huge and the key point to note is that CMOs will be increasingly engaged when it comes to use of technology within the enterprise. Over time, it will be viewed less as something that would be left to the CIO to be determined.