4 STAGES OF MAR - TECH - OPS ALIGNMENT FOR DIGITAL GROWTH
Tanvir Bhangoo
VP, Enterprise Solutions @ Toast | Growth and Transformation Executive | Bestselling Author | Advisor
Welcome to this week's edition of the Accelerating Digital Growth Newsletter.
This newsletter includes:
1- Article: Marketing - Tech - Ops Alignment: The 4 Stages for Digital Growth
2- Five Keys To Success: Digital Roadmap Fundamentals
Hope you find this edition informative, thought provoking, and valuable.
*And a big thank you if you have already subscribed to the newsletter!*
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MAR - TECH - OPS ALIGNMENT FOR DIGITAL GROWTH: FROM DISJOINTED TO CUSTOMER DRIVEN
I was advising a CEO of a high growth, mid-size company. She told me that as part of their digital efforts, they had a lofty goal of shifting half of their sales to digital channels over the next three years. The focus has been on building a direct to consumer channel (from orders to delivery fulfillment). Unfortunately, the progress had been slow.
I asked her how their teams were structured. She said "marketing owns the website, IT owns support and ERP, and Ops managed physical operations."
Right then, I knew the problem I had to solve was not a tech problem, but that of alignment and execution between marketing – tech – ops.
In this article:
I’ll walk through challenges of having a disjointed marketing, tech, & ops function, why the three need to integrate and operate at what I call a “Stage 4,” level, and what that may look like in practice in your organization. While this directly applies to consumer and B2C companies on a transformational journey, the core concepts and ideas are applicable to any company or industry that serves customers and is experiencing rapidly changing demands.
Issues with having a disjointed marketing, tech, and ops function.
Before we dive into the 4 stages of mar-tech-ops function, here are some of the symptoms of having a disjointed, or siloed marketing, tech, and ops structure:
You get the point. All of these issues are a direct result of lack of alignment, structure, and accountability between the three core functions.
Technology vs. IT. vs Product
It's also important to understand the difference between tech, product, and IT team. We usually see digital, product, tech, IT, all being lumped together under "IT," or technology becomes synonymous with “customer facing apps.” They are all different serving different areas and functions of the business.
Technology – includes the all encompassing function that oversees, plans, builds, implements, and supports technology at a company.
IT or Corporate Tech (information technology) – a part of technology function, usually covers the “support and enablement” side of the business. This includes internal technologies (ERP, workplace collaboration, expense reporting, etc.), employee support, cloud infrastructure, analytics integrations, security, etc.
Digital or Product – customer facing, “driver” of business function, covering areas that drive revenue growth. This function either builds or customizes a tech product. Examples include customer facing apps and websites, 3rd party integrations, loyalty systems, team member tools, in store tech (POS), etc.
In other words, within a tech function, the IT team supports, enables and optimizes the business, while the product and digital team drives growth and revenue.
The four marketing – tech – ops ownership alignment stages to accelerating digital growth:
Let's dive into the different stages of marketing, tech, and ops ownership.
Figure 1.
The evolution from stage 1 to stage 4:
In my digital growth acceleration model (click here), I discuss 4 major areas that accelerate digital growth. One of those areas is how your marketing, tech, and ops teams are structured, with four varying stages. Let’s dive into them below.
Stage 1: Disjointed
Many companies unfortunately are still operating with this model. This is how marketing, tech, and ops “were” designed to function before the onslaught of digital first businesses and startups. In this model, marketing is a core function, operations only deals with brick and mortar / external experience, and tech is still known as “IT,” and only responsible for support. And unfortunately, this is what we are still being taught in more university courses and by organizational gurus.
Here we see an “IT manager” supporting all areas of the business, including the product side of things (app and web). Instead of having talent and resources aligned towards revenue generating products such as online ordering app and loyalty, with the right talent and capability with a growth oriented strategy, companies still see tech as support. They tend to always play catch up, have a very clunky user experience across all spectrum, and marketing tends to take over and manage apps, websites, and new digital channels.
Example:
As a CEO, when you ask your CMO when can you see the data and results from your recent marketing campaign… The answer is usually “we’re waiting on IT.” While IT is manually pulling reports from 5 different systems as marketing owned websites and apps are not integrated, optimized, and are running on legacy tech that no one knows how to manage.
Stage 2: Siloed or Process Driven:
Most companies within the consumer space fall into this category. The ancient management philosophies of structure and swim lanes are a direct driver of this model. Unfortunately, the speed and chaos at which customer demands change make it hard for this model to achieve digital growth. This instead results in the wrong behaviors, turf wars, and finger pointing, all driven to maximize “individual team’s” growth, while neglecting the overarching mission.
I’ve illustrated the siloed nature of responsibilities in the outer circle of my Mar-Tech-Ops Ownership Model below (figure 2). Usually we see marketing as responsible for core “marketing” activities, tech taking over both IT and product responsibilities, and Ops still being primarily driven by brick and mortar or customer channel responsibilities, and usually has to react to latest innovation or upgrades at the customer or store level. Lack of alignment and information flow between functions make it harder to move at the pace of the customer.
Example:
Marketing buys and implements their own customer data platform, which does not speak to the tech (product) app and web, and requires manual data modelling (usually by IT or finance). Tech launches a new feature on the app that does not address core functionality requirements as per feedback from customers. Operations promised store team members new product and collaboration tools, but these are deprioritized on the tech roadmap.
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Figure 2.
Mar-Tech-Ops Ownership Model. The outer circle represents general responsibilities and actions taken by marketing, technology, and ops in a siloed approach. It illustrates the lack of product and customer driven accountability to address customers’ changing demands.
The inner circle represents the joint responsibilities of a customer driven approach. The siloed responsibilities remain to best support the business, but part of marketing, tech, and ops integrate to best build products, grow digital channels, and deploy the right programs in a quick and iterative manner.
Stage 3: Product Driven or Agile approach:
A few, handful of leaders in any industry are truly operating under this structure.
In this stage, many of the traditional companies who’ve invested in their transformation actually make a drastic change to restructure their teams to a product line approach. All activities and responsibilities are driven by the core product, for example, a digital ordering app, web, kiosks, etc. This approach aligns efforts across tech, marketing, and ops to build, deploy, and optimize a successful product, versus operating within a defined set of traditional swim lanes.
Here, we have a team that is headed by a product lead or GM, under which you have a marketing function, tech & product development function (either in house or outsourced – a topic for another day), and an operations / customer facing function. This connects the business with the product, and allows teams to deliver the best product experience to their customers to drive revenues and profitability. In other words – it allows companies to quickly build, test, and deploy digital functionality, run customer campaigns, and gather customer feedback to drive digital sales.
Where this model falls short is that your customer does not care what channel they interacted with or made a purchase from – they want what they want, when they want, and how they want – as per their choice – in a seamless, unified, and wowing experience.
Example:
App team builds a customer experience that does not integrate with your in store experience. Marketing teams have a tough time calculating the total cost of acquisition given the systems do not track customers who came in store, but ended purchasing online after seeing an ad on instagram.
Or
Team member at the store tells the customer that this BOGO offer is only valid on the app. (this is usually because the systems don’t speak. A.k.a. different teams working in a silo or heads down on a product first approach, deprioritizing the experience and integrating across systems, made hard by legacy systems.
Stage 4 – Customer Driven Approach (The Utopia):
This is what I call a “customer driven” approach. This is what I believe and envision the future of marketing, tech, and ops should, and will be driven by. I predict we will see companies that are leading the pack portray some of these characteristics. Its the only way we can truly keep up with a unified customer experience for consumers that demand the best across a spectrum of changing needs.
Similar to the product driven approach, teams sit under one team with responsibilities aligned to a singular goal. I highlight this in the inner circle of the Mar-Tech-Ops Ownership Model shared above.
But instead of aligning to just a product, teams are integrated based on the customer needs across the journey. One team may be responsible for multiple customer needs, but multiple teams will not be responsible for one customer need – or we go back to a product driven approach.
For example, here is a simple customer journey for a retail store:
In a product driven environment, one team would oversee the app, one team would oversee the web, and the entire customer journey along with it. Many times, some of the journey points may even be neglected, such as fulfillment experience when ordered through the app for pickup, given product and marketing teams are usually focused on activities leading to the sale.
On the contrary, in a customer driven environment, each team owns one or more parts of the customer journey, across all products and channels. A product manager, a digital marketer, an ops deployment leader, and other roles may own just the pre-purchase journey steps such as browsing & ordering steps from the list above, across app, in store, and 3rd party channels including instagram, other retailers, and even pop-up stores. This drives a seamless customer experience across all touchpoint - because customers (we) don't care if its an app or the store - we want choice and convenience in a seamless experience!
This approach truly drives the ever changing experience that customers need – in a unified vision across all channels. We as consumers touch multiple points before making a purchase – we go to a store to try on an item, we compare it on the website, we download the app to make an order and opt-in to the loyalty program – and we expect a unified experience. This approach delivers that exact experience, regardless of the channel.
Example:
Your stage 4, customer driven team, has the systems, analytics, and feedback mechanisms in place to follow the customer across all product touch-points (instagram ads, in store, app, website, Alexa answers), and provide the customer the value that they need to complete their purchase, whether it’s a private booking, a surprise and delight gift, or a bonus loyalty offer.
Conclusion:
Customer driven approach – Stage 4 – actually identifies and meets changing customer demands, and not merely lip service. If you’re looking to operate in a manner that actually meets your customer demands without internal friction, and is sustainable – this is the structure to strive for.
In a future blog, I’ll touch on how to go from a stage 1 to a stage 4, and steps that you can take as an executive leader.
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Biweekly Five Keys To Success: Digital Roadmap Fundamentals
1- Do a Capability Analysis: Understand what your technology, digital infrastructure and people capability looks like today. What is your current state, and what gaps exist.
2- Bridge the Legacy Tech and Innovation Chasm: The most important part of this section is to start with the technologies and infrastructure that is already in place, and build a roadmap that (1) maximizes their usage, and (2) minimizes disruption as you modernize your technologies.
3- Shortlist Options with Focused Criteria: Once you identify how current technology works and is integrated, and where you are looking to go, now it's time to identify which new investments and technologies you need to make, by running these against a criteria based on the business and your high level goals.
4- Calculate Return on Investment and Prioritize: One of the major components of a roadmap is the prioritization of these technologies against other initiatives, how much to spend, and timing of implementation. Hence, we need to calculate the Return on Investment on your digital roadmap, as well as the pay back period.
5- Operationalizing The Digital Roadmap: Nothing is complete without execution. You must build a timeline with key milestones, resource allocation, tradeoffs and deliverables. This allows teams to stay on track, and keep their eyes on the prize, with clear division of accountabilities and decision making rule sets.
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The next edition of the newsletter will include an in-depth look at digital roadmap strategy formulation and ROI analysis, and the importance of balancing legacy tech with an innovation mindset.
Bio: Tanvir Bhangoo is a consultant and advisor who works with C-level executives at leading and growth companies, helping them accelerate their digital growth and boost operational efficiencies. He’s a former tech executive and a bestselling author. He’s a graduate from DeGroote School of Business MBA program, and also a collegiate football national champion.
Contact: you can get in touch with Tanvir at tanvir@tbxdigital.com