An on-going dilemma for companies striving to harness technology to help improve performance across a range of business functions is the question of “where digital should sit” within their organisational structure.
Research for the recent Econsultancy / Blue Latitude Impact of Digital report found that digital is most likely to be part of marketing. In fact, more than half of the 100-plus companies surveyed for this report said this was the case (see chart below).
Therein can lie a problem. Broadly speaking, the research found that while organisations are getting to grips with digital for the purposes of sales and marketing (including PR), they have been less able to exploit digital effectively to improve other areas of their business such as HR, customer service and product development.
A blog post published last week on Econsultancy goes into more detail about how exactly digital and the internet have revolutionised different parts of the organisation.
As well as being cocooned within marketing departments, digital is also commonly ensconced as part of the direct channel or as a standalone team. There is more power to the elbow of digital when it is able to demonstrate its bottom line benefit as a profit centre.
There can be a risk of digital becoming its own silo, but such a structure can still work very effectively provided there are processes and a culture which enable digital innovation to permeate other parts of the organisation.
According to one senior executive interviewed for the report: “We [the digital team] are right at the core of things, learning and sharing. We’re involved where we need to be, and the rest of the organisation doesn’t see digital as something they can’t get involved in. Which is brilliant.”
But another said: "We [e-commerce] risk disappearing in the organisation: 13,000 people in branches, 3,000 in telephony and 30 of us within e-commerce. It is quite an interesting experience because often people do not know what we do.”
Where does digital sit within your organisation? (2010)
Source: Econsultancy / Blue Latitude Impact of Digital Beyond Sales and Marketing survey 2010 (n=119)
So where should digital and e-commerce teams sit? There is no right answer to this but business leaders need to ensure that their companies are evolving digitally, whether this is through matrix-type management structures or properly empowered digital champions.
Apart from residing within marketing, the next most common organisational set-up is for digital to sit within “a separate digital team reporting into a senior manager”.
Other types of set-up include a digital team which straddles more than one department, most typically IT and marketing, but also in some cases sales and communications.
Digital’s original home in IT is decreasingly relevant. It is encouraging that only 6% of survey respondents say that digital is “part of IT”. Organisations are often impeded when IT owns digital although, of course, this department needs to be fully involved.
Some respondents and interviewees for this research feel that insufficient IT resource limits the ability to deliver value to customers and the organisation. For most companies, it is crucial that they are able to incorporate some development function within their e-commerce or digital units, or are able to outsource parts of development.
The chart above, carried out for this year’s Impact of Digital research can be compared to data from Econsultancy’s Managing Digital Channels Best Practice Guide, written by Dr Dave Chaffey and published in 2008.
Respondents were asked “what the main location was for digital marketing or e-commerce within [their] organisations”. Just under half of respondents (45%) said that e-commerce was part of marketing and 29% said there was “a separate e-commerce team supported by a senior manager”.
Which is the main location for digital marketing or the Ecommerce team in your organisation? (2008)
Source: Econsultancy Managing Digital Channels Best Practice Guide (n=108)