Q&A with Tom O'Toole (Hyatt)

Faced with the need to measure the impact of their marketing investments, many marketers are quick to throw up the excuse of “Well, if I had the data to do it, I would.” True, most of us can identify with the challenges of getting enough quality attention and support from IT to make our initiatives successful. Safe to say that many of us have even complained from time to time about how IT was letting us down, which helps explain why marketing departments are rife with examples of “work-around” solutions outsourced to vendors or operating “custom” software on servers hidden in closets.

But Tom O’Toole has no excuse for expectation or delivery gaps forming between marketing and IT. Tom is both CMO and CIO for Hyatt Hotels, likely the only such position in a Global 1000 company. MarketingNPV recently had a chance to talk to Tom and get a glimpse into aspects of this permanent balancing act, and some advice on how marketers should be approaching IT for help — particularly in the arena of enabling credible measurement.

MarketingNPV (MNPV): Can you describe your function at Hyatt?

Tom O’Toole: My role at Hyatt includes both the CIO function and the CMO function. I’ve got responsibility for all the people at Hyatt who build and maintain our main IT systems, our customer service interfaces, our information and financial systems, our Web presence, and all the other IT elements of our business. I also have accountability for our marketing team, who find new and creative ways of driving customers into Hyatt properties, developing those partner relationships, ensuring that our value propositions are always first rate, and building on the strength of our brands.

MNPV: Sounds like fun.

O’Toole: It is. Or I should say, it can be — most days.

By experience, background, and, frankly, identity, I’m a marketing person. But the reality of the dual job hit me when, one day shortly after taking on responsibility for IT, the e-mail system went down. My first thought was, “Who am I going to call to complain about the e-mail system?” And I realized, “Wait a minute, I’m responsible for the e-mail system. How did I let this happen? I don’t want to be responsible for the e-mail system; I just want to complain about the e-mail system like everyone else.”

So it has its moments. But, on the whole, it’s a great job and a terrific challenge.

MNPV: How much similarity do you see between marketing and IT now that you’re an insider on both fronts?

O’Toole: The priority needs and interests of marketing and IT tend to go hand in hand. For example, the same challenges we face in creating accountability for the marketing function — credibility, integration with the business functions, demonstrating relevance to the business, technical relevance and measurement — are top of mind in IT too. In fact, I just got an e-mail earlier this week asking me to participate in a CIO conference. The subjects they wanted me to address were “credibility for the IT function — ROI analyses for IT projects; demonstrating the value of the IT organization; documentation or presentation showing IT initiatives mapped to enterprise goals; IT plans linked to performance metrics; and reporting tools and examples such as dashboards and scorecards.” Sound familiar?

MNPV: Why do you suppose both lists started with “credibility”?

O’Toole: I suspect it’s because both functions are in the process of maturing from technical and staff functions to business functions. Marketing is in the process of maturing from a communication function to a business function. IT is maturing from a technical function to a business function. Like CMOs, CIOs coming up through the ranks today are people with business rather than technical backgrounds.

With that maturation comes a change in the metrics that are appropriate to measure the effectiveness of the function; and with the change in those metrics, the underlying systems necessary to track and report also must mature. So if you identify three different types of measures — communication, functional, and general business (financial) measures — accountability in both marketing and IT is moving down that taxonomy. And whenever you have people and entire functions going through these transitions, you’ll find that credibility is key in the early stages when the ability to measure based on hard evidence is still coming up the curve.

MNPV: How do these three categories of “measures” differ and how do they overlap?

O’Toole: Communication measures, those relating to the marketing communications functions — awareness, brand equity drivers, etc. — are par for the course. We — you, me, and the other marketing people — have a responsibility to look at those things and continuously improve our performance. But do they make it into the book of relevant and timely information that gets circulated at the board meetings? Seldom.

Functional measures are valuable as tools for the rigorous and prudent management of our marketing functions. One example measure we track is activity at the different tiers of our Gold Passport loyalty program. We have gold, diamond, and platinum levels, just like all the hotel programs do. We monitor activity by tier, movement by tier, and activity within tier. Is that important to the person responsible for managing the program? Absolutely. Would she be negligent if she did not measure and manage that? You bet. But is that ever going to make it into the board book? Not a chance. If we cannot tie functional measures to financial measures, they’re of little use in creating marketing accountability and the credibility that each of us seek for ourselves and for our functions.

Business measures are the ones that help us understand how well we’re managing the organization’s resources and measure the economic value we’re creating for shareholders. That’s where we link our overall marketing spending levels to expected growth.

MNPV: So how do you pull all these different measures together into something coherent for the purposes of marketing accountability?

O’Toole: There are a few parts to that answer.

When I first accepted the CIO responsibilities, I commissioned PWC (now IBM Consulting) to help me get a baseline on what was going on in IT. They came back with a few interesting observations. Number one was that we had a shadow IT organization that exceeded the size of our formal IT organization. There were more “IT” people embedded in functional departments like ops, marketing, HR, and other parts of the organization than there were in the IT department.

Now, as the once and still head of marketing, I understand how this could happen. It just takes so long to get things through IT that it’s often much faster to do it within marketing. No one wants to wait 14 months for a marketing dashboard that has to go through multiple feasibility and estimating gates. But what if the IT staff one day said, “We just hired our own ad manager, and we’re doing our own PR, and oh, by the way, we hired our own PR agency.” My guess is, a number of people in the marketing department might have a problem with that. Well, it’s the exact same thing in reverse.

Another thing they told us was, “You have multiple versions of the truth.” This really is the most consequential one for the subject that we are talking about today, marketing accountability — the threat of multiple sources of information.

Today, in a Sarbanes-Oxley world, there can be only one version of the truth at the board level — the Sarbanes-Oxley compliant version.Those are the only numbers that make it into the board book.

Like many companies, we’ve had to invest in a single, worldwide analytics platform at the enterprise level to drive both accounting and marketing analytics, so when they are reported, they are based on a single version of the truth that connects the different users in different parts of the company. This includes distribution channel reporting, pricing, etc. All of that information is in this single enterprisewide financial reporting system that we bought from one of the big business intelligence software providers.

MNPV: I see the compliance benefits. But doesn’t that create a bit of an overengineered solution for marketing accountability?

O’Toole: If you try to take all the dimensions of data available in our central database, you wind up with a marketing dashboard that will tell you everything you want to know to the nth degree of detail, but isn’t very relevant or easy to use. We produced an absolutely heavy-duty dashboard that was way overkill for typical business users. They wanted something user-friendly and fast. They didn’t need to answer every question any user anywhere in the company might conceive and then let them drill down on it.

What we wound up doing instead was drawing a subset of the data to a marketing user data mart, and then letting the marketing group develop their own front-end interface that’s efficient, easier to use, and yet coordinated with IT. This way, there is still only one version of the truth, and we can still pull information in from outside sources — research vendors and the like — to complement it.

I’ll give you an example. In the hotel industry, the “Nielsen rating” of our business is known as REVPAR — revenue per available room. It’s published by a company called Smith Travel Research. Obviously, our internal system does not originate that data. But it’s pretty easy to build an interface to pull in that information into the marketing data-mart system and integrate it with the other information available.

Bottom line: We’re able to maintain the integrity of the truth of our financial data, yet extend our solution flexibility to marketing so they can develop more robust accountability and intelligence in a way that serves the needs of the marketing decision makers.

MNPV: And in the process, inject the marketing measurement tools with some enhanced credibility, I assume?

O’Toole: Exactly. Building islands of accountability is ultimately limiting to the cause of marketing accountability, because freestanding marketing metrics platforms present some very real risk to the people in finance, operations, and IT. Marketing gains lots of credibility by trying to work within the overall framework of accountability of the company on the whole, not ignoring it.

Don’t get me wrong though: There’s nothing wrong with a custom dashboard or analytics user interface for marketing applications, as long as it’s drawing the core financial data from sources that can be traced directly back to that single version of the truth. That pretty much ensures you get the best of both worlds and overcome a lot of those organizational challenges.

MNPV: So do you see marketing and IT growing closer in the future?

O’Toole: Well, I had an interesting experience at a CMO conference last year. Lots of CMOs were presenting there, yet when I walked through the trade show area, the exhibitors were not the conventional media companies that one historically would have seen in that situation. They were companies like SAS, Cognos, MicroStrategy, Oracle. There’s evidence that change is afoot in the world of marketing.

Second, as CIO, lots of vendors call on me — SAP, Oracle, Hyperion, PeopleSoft, and so on. What are they talking about? In many cases, they want to talk about platforms for measuring marketing metrics. Typically, they have a marketing analytics module or a campaign management tool. Their interest isn’t just the financial database, it’s marketing metrics and measurement systems.

Third, there’s always conflict in the interface between business users and the IT staff. This happens in HR, accounting, finance, sales … not just marketing. But marketing may be one of the functions where that fault line tends to be the most active. Perhaps because the marketing technology tools are becoming easier to use and the business users are becoming sophisticated enough to build pretty heavy-duty IT functions on their own.

MNPV: Having seen both sides, how would you advise marketers to get better support from IT?

O’Toole: From the vantage point I’ve had, I think there are a few simple guidelines that will help.

First, don’t develop and staff your own applications without at least discussing it with IT. If you do, we don’t have the expertise or the staff to support them. Most often, these systems aren’t well-documented. Look around. If you’ve got database programmers in marketing, that’s crossing the line. Analysts, fine. But not application developers.

Second, don’t mess around with the network. There are security concerns, bandwidth concerns, and reliability concerns. You really have no idea how problematic it can be for a network manager whose job depends upon network performance and uptime to all of a sudden have major delays or outages caused by a rogue Web server he didn’t even know was connecting. It can literally bring the entire company to a standstill.

Third, try to stick with packaged solutions. If you can recommend a solution from a vendor who has already built all the interfaces with the software we run our enterprise on and has tested them with dozens of other clients, it takes a tremendous amount of work (and time) out of the assessment process. If an IT person was presented with a solution that was professionally developed, professionally supported, fully documented, and based on industry standards, he’d probably say, “Well, I’d rather marketing was using a system that we’re supporting, but that’s not so bad. That’s a system I can deal with.”

MNPV: What about from the other perspective? What should IT be doing for marketing?

O’Toole: Number one, work on response time. It seems to me that, as a marketer, whenever I ask for anything from IT, their answer starts with, “We’ll have to do a scoping study.” And the cost for a scoping study will be charged back to marketing, and it seems like a scoping study typically takes 14 months. So the business users say, “You want to know why we build our own systems? Because we don’t have 14 months to do a scoping study.” IT has got to get faster.

Second is cost. First, marketing gets to pay for the scoping study to tell how much the project is going to cost. Then they get to pay for the overhead often embedded in the IT function. IT needs to be more efficient in getting to the “go/no-go” point.

Third is flexibility. As marketing becomes more and more critical to the success of the organization — be it in revenue generation, brand development, pricing, whatever — IT needs to begin anticipating the degrees of flexibility that marketing will need and designing that into the foundations of systems architecture. If you really want to be a market-oriented company with a world-class marketing capability, you need to make the investment to enable and support that. You need to think of marketing as a primary customer of IT, not a secondary one.