Aligning technology and customer functions post-pandemic
Today, technology companies and sector verticals are converging rapidly. Retailers are now e-commerce platforms, traditional automotive companies are experimenting with autonomous vehicles and telematics software, primarily holding a digital bank account is no longer considered quirky, and physicians are a mere Zoom call away.
Initially focusing their efforts on innovation and customer, organisations are now beginning to remove the divide between their digital programmes and traditional IT delivery systems by consolidating them into a single technology operating model*. In 2018, 18% of technology leaders said their companies had either converted their digital and IT teams to a single operating model or developed a fully digital model; by 2020, this number had almost doubled*.
However, organisations are also realising that this is not enough. Simply creating a single technology operating model does not necessarily build the right customer activation platforms, nor does it guarantee a streamlined integration. A deeper, more complex, and intentional integration is required today. Companies need to simultaneously consider structure and talent, to ensure that customer and technology functions partner effortlessly and design a frictionless end-to-end customer journey for increasingly sophisticated customers.
Using the concept of balance of power, organisations should focus on the realignment of functions to flatten the hierarchy and streamline accountability. The balance of power between technology, consumer, digital, and product most commonly take place in one of four models:
Technology-weighted model
The technology remit expands into the areas of product, advanced analytics, and enterprise transformation. This structure is increasing in popularity due to the elevation of the technology role and the increased importance of technology to company strategy.
The technology leader has an expansive remit covering IT, technology and engineering, data management and occasionally analytics, product management, and digital. The role is then supported by a marketing officer who is brand and creative focused, and who may or may not sit on the executive committee. This tech role almost always sits on the executive committee, reporting into the CEO.
Some of the advantages will mean technology being housed under one accountable leader, bringing IT and platform technology closer with product development and the customer experience, reduces friction between digital, product, and technology teams as well as a strong voice for cultural transformation.
Consumer-weighted model
The customer remit is combined with digital to make a holistic customer-focused role, looking at channel strategy, digital touchpoints, customer experience, and e-commerce. As the least common of the structural archetypes, this structure sees a combined marketing and digital function, or a holistic omnichannel leader sitting on the executive committee.
This role owns all marketing from digital/performance to brand as well as all go-to-market strategy, customer experience across both digital and physical touchpoints, sales, and product management. In this archetype, the marketing organisation is more centralised, with one leader reporting into the CEO as opposed to having the marketing function distributed across business lines and regions.
With this, organisations will have a strong commercial and customer focus, greater opportunity to bring in highly customer-centric talent to support the customer strategy and be able to build a direct-to-consumer offering.
Equally-weighted model
A leader is brought in to better connect technology and customer functions, or to own a digital profit and loss margin. Most commonly, the technology leader will own IT and technology, engineering teams, and in telecoms, sometimes network infrastructure.
The “middle” leader – often a chief digital or product officer – will focus on customer-facing technology and digital products/digital touchpoints. The marketing leader then acts as a brand and channel leader. Typically, two of the three roles sit on the executive committee.
This approach increases depth of expertise in both technology and customer functions, allow strong representation of technology, digital, and customer on the leadership team and will dramatically increases talent pool, and the number of opportunities to promote or hire diverse talent.
Product-weighted model
Pure technology organisations and digital platforms have adopted a model in which the development and management of the digital product is split between a technology officer and a product officer. The combination typically consists of:
1) An engineering-focused chief technology officer with the remit to build platforms and products,
2) A chief product officer to handle product management, strategy, design, roadmaps, and customer experience, and
3) A brand and creative-orientated chief marketing officer.
This model allows for specialist product talent with industry knowledge (while the technology lead can be an engineering athlete) and allows the product leader to focus on more user-oriented technology (e.g. design and user experience [UX]). There is no one-size-fits-all solution; organisations need to deliberate and prioritise the leadership capabilities that best align with its go-to-market strategy.
Each of these four structural archetypes have a distinguishing balance of power between core considerations. Each structural archetype has its own talent implications around accountability and role responsibility spanning a spectrum of core expertise. The archetypes are continuously shifting with the business landscape; organisations that initially began with the technology-weighted model may have already evolved to an equally-weighted model.
Using the concept of balance of power, with an agile culture, organisations will now be able to better integrate technology and customer functions.
*Products and Platforms: Is Your Technology Operating Model Ready? Frazier, Ross, Naufal Kha, Gautam Lunawat, Amit Rahul, McKinsey Digital, February 28, 2020.
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