Use of Business Intelligence (BI) by CIO’s and CMO’s
There has been a long history of conflict between the marketing team and the IT group in many organizations, signified by the conflict between the CIO’s and CMO’s. The two parties believe that they are the ones charged with the responsibility of owning and driving the digital strategies in their organizations. The CIO’s and CMO’s are observed to complement each other implying that their conflict can be attributed to the absence of communication between the two and the management, as well as the absence of leadership at the various levels. For the organizations to meet their consumer needs, the CIO’s are supposed to communicate with the organizations, and the organizations should do the same, to the CIO’s. The involvement of the marketing departments in projects involving technology applications is important, and they should strive to understand their roles in projects, through clear communication channels and good leadership of the projects (O’Leary, 2002).
The area of customer relationship management (CRM) requires the definite cooperation of CIO’s and CMO’s. Their relationship is involved in the process of marketing automation. This automation is designed to improve the implementation of marketing strategies by more efficient planning of programs and better assess of the ROI. Marketing is done with consideration of the customer, unless when it is conducted concerning other businesses. Marketing is usually viewed as promotions, which do not complement other strategies due to their abrupt effects on customer behaviour leading to pressure to meet the increased demand, leads, which do not provide opportunities for monitoring, and literature, which is not solution oriented. The CIO’s deal with other functions that may influence consumers including operating systems with inadequate manoeuvrability, sluggish reaction times and concerns of data integrity (Stenzel, Cokins, Schubert, & Hugos, 2010).
These functions are designed to improve productivity and profitability by developing a customer interface that allows them to communicate their grievances. Business intelligence is used to assess trends in business and consumer clients, therefore helping to recognize the weak areas in a business. Such information is vital since the organizations can come up with strategies to strengthen all business sections. Effective implementation of business intelligence tools has been observed to increase sales using the fact-based selling tools, increase profits by aiming at gainful activities, build and retain customer loyalty, improve on the accuracy and timeliness of sales forecasts, attain budgeted sales, reduce low-yield sales practise, effect higher-yield promotions and advertising, as well as predict the behaviour patterns of consumers and projections (Stenzel, Cokins, Schubert, & Hugos, 2010).
The reduction of low-yield practices in any business is vital and easy to monitor using business intelligence. These systems help to identify problematic clients who increase the cost of production, through either high rates of products returning or problematic shipping requirements. The elimination of such clients helps to improve sales by focusing on the less troubling consumers. The business intelligence systems identify things such as unusual product orders and the time spent on individual clients as indicated by the sales representatives. In cases where the organizations deal with other businesses, they may choose to drop the clients or increase the cost of selected items. The BI systems can also provide the information necessary to produce high yield promotions and advertisements. The systems capable of handling such information are unavailable for most businesses since they incorporate products, clients and advertising features. The unavailability of this kind of data leaves most organizations to come up with advertisements based on guesswork. This implies wrong timing, message and channel of relaying the advertisement to the public, which leads to unattainable targets (Broadbent & Kitzis, 2004).
The profitability of the advertisement is based on the cost of the promotion. The BI systems are therefore useful in identifying the noteworthy features of clients purchasing the most profitable items and creating purposeful messages that are relayed appropriately, with consideration of many factors. These systems can also help in the re-implementation of successfully executed strategies, whereby similar conditions exist. Data mining technology is a BI tool that analyzes past data intending to predict future consumption patterns. A case study of this strategy in implementation is in the bank system. One of the banks in the US set out to get over 150,000 new accounts. This required them to send about 10 million emails to potential clients, with an expected return of about 2%. Instead of doing this, they used data mining techniques to target specific individuals, which produced a response of 12%. Data mining models can be used for many more predictions, including expected revenue from specific clients, and the expected orders of particular products. With such systems in place, the CIO’s and CMO’s work together to do away with obstructions that affect profits, margins and revenues and in doing so improve business success rate (O’Leary, 2002).
Out-sourcing the CIO
Outsourcing is a common strategy in organizations since it has been observed to reduce expenses, improve on quality, facilitate better client solutions and enable the alteration of operations. Outsourcing is also advantageous to organizations in that it raises expectations for job performance, enhances the capacity of businesses to plan, and facilitates the fast execution of new strategies. Surveys conducted in both the United States and Europe have shown that business executives prefer to outsource a minimum of one primary function, namely IT services. The main reason why business executives prefer to outsource the services of Chief Information Officers is that their services are expensive, to be provided on a full-time basis. Outsourced CIO’s are senior members of the management team since their services are vital in helping any business to get off the ground (Kakabadse & Kakabadse, 2003).
The hefty salaries demanded by business executives make outsourcing preferable, since the business benefits, due to the services provided. Outsourcing the CIO’s is less expensive, faster and more effective, but these benefits are only obtained by large organizations. Many businesses are small in nature, and therefore implement the basics of information technology, without evaluating their efficiency; therefore, IT does not present them with advantages, in terms of productivity or innovation. Large businesses on the other hand have the capabilities of hiring CIO’s and the entire IT team, on a full-time basis. Smaller companies can obtain the services of IT experts periodically, through outsourcing. By doing this, the small and mid-sized companies can benefit from the services of CIO’s which include: saving on time, financial and personnel resources, enabling the business to focus on its primary functions, and providing good quality of product at the right prices based on market studies and surveys (Kakabadse & Kakabadse, 2003).
CIO companies that outsource their services are specialized in the management of technology, processes and people. This implies that through outsourcing, small and mid-sized companies are able to benefit and learn from the experts, which is beneficial to them in that they can keep improving their organizations, even in the absence of the CIO expert services. Most organizations prefer to outsource the IT services, since the company executives manage the contracts, while the service providers manage their people, to meet the requirements. Since contracts are evaluated based on the performance of the service providers, the latter is served with the responsibility of managing the risks associated with the groundwork. Considering the role and responsibilities of the service providers in an organization, their work should not be rushed, but rather steady, to attain the best possible result. Businesses dependent on outsourced CIO services should also cultivate good relationships with the service providers, based on trust, for them to provide progressive improvement and value addition for the organization (Parker, 2008).
References
Broadbent, M., & Kitzis, E. (2004). The New CIO Leader: Setting the Agenda and Delivering Results. Harvard: Harvard Business Press.
Kakabadse, A., & Kakabadse, N. (2003). Knowledge and Process Management. The Journal of Corporate Transformation, 10(1), 61-70.
O’Leary, D. (2002). Enterprise knowledge management. 31(3), 54-61.
Parker, B. (2008). Best Practices: Retail CIOs Must Run Their Organization Like a Business. Leiden, Netherlands: IDC.
Stenzel, J. P., Cokins, G., Schubert, K. D., & Hugos, M. H. (2010). CIO Best Practices: Enabling Strategic Value With Information Technology. Hoboken, New Jersey: Wiley.