CMO & CIO: A Dream Team for Organizations Navigating the Current SaaS Boom
By: Theresa O’Neil, CMO at Zylo
Increasingly, organizations are forgoing on-premise software in favor of SaaS solutions. As a result, the SaaS industry is booming — with no signs of slowing down. In fact, Gartner projects SaaS will grow more than 15% this year, reaching an estimated $120 billion in total revenue.
As SaaS portfolios continue to grow, IT teams control a rapidly decreasing share of spend. Our recent analysis found that today, IT owns a mere 27% of SaaS spend, which is a 35% decrease year over year.
Typically, the remainder of SaaS spending is made by myriad teams and individuals throughout a given company. But there’s one team that’s a particularly significant driver of SaaS growth: marketing.
Today, chief marketing officers rely on the right martech stack to drive business results. And it seems CMOs’ investments in technology will only continue to grow. According to a report from Foundation Capital, tech spending made by CMOs is predicted to grow from $12 billion to $120 billion in the next 10 years.
But all too often, the martech stack is bogged down with unnecessary, inefficient SaaS solutions, which puts a strain on tight marketing budgets. CMOs must make it a priority to maintain visibility into their growing martech stacks and ensure they’re only keeping the technology that’s driving the biggest ROI. A strong partnership with the Chief Information Officer (CIO) is essential.
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CMOs Struggle to Gain Full Visibility into the Martech Stack
It might sound simple enough for a CMO to gain full visibility into all SaaS purchased by the marketing team — and then determine which tools to keep or jettison. But in reality, it gets complicated.
New martech technology companies seem to spring up out of nowhere. According to MarTech Series, there were a mere 150 marketing technology companies in 2011. By 2019, that number had grown to roughly 7,040.
What’s more, tech consolidations happen each year — which means the players are constantly changing. For example, Slack, a collaboration tool, was recently acquired by Salesforce.
To further complicate matters, many CMOs don’t stick around very long. In fact, the median tenure at 100 top US brands is 25.5 months — the lowest it’s ever been.
That means every few years, a new CMO joins an organization. When they do, one of their first tasks is to determine what martech software has been purchased by the marketing team — and which solutions it makes sense to keep. Oftentimes, this involves manually combing through records and receipts, and even surveying individual members of the marketing team.
It’s not uncommon for CMOs to come across some unpleasant surprises along the way. For example, team members may be using multiple applications to serve largely similar functions. And some licenses and applications may not be used at all.
As a result, budgets get out of control and precious marketing dollars go to waste. CMOs must find a more effective way to continuously identify the software their teams are using, and then rationalize it. A close partnership with the CIO is the only way.
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Close Collaboration with CMOs and CIOs is Essential to Effectively Manage Martech SaaS
When SaaS grows unmanaged, it introduces unnecessary costs and risk. A growing number of organizations recognize this and are investing in strategies and technology to more effectively manage SaaS.
Typically, SaaS management technology is marketed and sold to IT or procurement teams. However, SaaS management tools are also ideal for CMOs and other marketing leaders looking to gain full visibility into the martech stack — and then optimize it to get the most from their marketing dollars.
By partnering with CIOs and leveraging the right SaaS management technology, CMOs can discover all technology that’s been purchased by the marketing team. That includes everything from solutions purchased via a formal procurement process to apps obtained through a free trial and then charged to an employee’s credit card.
Once a CMO gains visibility, they can leverage usage data to determine which software is actually being used to help their team reach its goals — and which are falling flat. Unused or underused apps (as well as apps that are deemed ineffective or inferior) can be eliminated immediately or at renewal time, depending on the contract terms. Then, only the best, most effective SaaS remains. Additional enablement can be provided to marketing team members to increase adoption of these tools and ensure the biggest ROI.
Once the martech stack has been optimized, CMOs can partner with CIOs to ensure marketing team members can easily request and access approved software. This is an important step because if a team member has trouble accessing the technology they need to do their jobs, they’re likely to go rogue and purchase a solution on their own. This introduces unnecessary risk and puts additional strain on the budget.
It’s Time for CMOs to Manage Their SaaS Stack
SaaS portfolios are expected to grow, with the marketing team significantly contributing to this growth. At the same time, the tenure of CMOs continues to decrease, which means a new marketing leader takes the helm on a fairly regular basis. There’s never been a more important time for CMOs and CIOs to work together to take control of martech SaaS growth.
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