How to Organize Digital Commerce to Drive Growth

Digital commerce is fast becoming a dominant priority for organizations. Many leaders are increasing the strategic importance of digital commerce by investing more in initiatives. They are also evolving the way their organizations do business to accelerate digital commerce growth.

Digital commerce organization design is a hot topic right now that is top of mind for many senior leaders. Increasing ownership of digital commerce throughout the organization is a critical key outcome they are looking to achieve. Simply put they are driving change to make digital commerce an initiative that is owned by the many, not the few!

The burning question leaders are asking is "what should our organization look like to accelerate digital commerce growth?". Leaders should look at growth in a holistic sense in terms of commercial growth, but also the growth of business capabilities (talent, partners, and cross-functional working).

Four Digital Commerce Organization Models

We see four common digital commerce organization models in practice shown in the graphic below. The concept of shared organizational ownership of digital commerce steadily increases from left to right. The increase in organization ownership results in the strengthening of business capabilities to execute an organization's digital commerce strategy.

• Unstructured - No digital commerce organization structure in place. There are pockets of digital commerce talent in functions, but cross-functional coordination is lacking. Gartner's 2021 digital commerce survey found only 2% of organizations identified as being unstructured. Any organization that self-identifies as being unstructured should look to explore and establish one of the following models.
• Centralized - A centralized team of digital specialists leads and executes the digital commerce strategy for the organization. Building a centralized digital commerce team is a natural first step to formalizing your digital commerce organization to increase strategic and execution maturity. The centralized team's purpose is to accelerate the organization's digital commerce strategy, execution, and capability growth.
• Hybrid - A digital commerce center of excellence (CoE) and core business functions work collaboratively to set and execute the digital commerce strategy. Gartner's 2021 Digital Commerce Survey found that 49% of surveyed digital commerce leaders are transitioning to a hybrid model. The shift to hybrid increases organizational maturity by building a digitally comfortable and capable organization whilst increasing shared cross-functional ownership.
• Integrated - Digital commerce ownership is integrated into each core business function to execute the strategy end-to-end. Transitioning to an integrated model disbands the digital commerce CoE, this shift requires significant change and won't be suitable for all organizations. This is reflected in the 2021 Gartner Digital Commerce Survey findings: Only 22% of surveyed organizations are leveraging an integrated model.

What's the right model for my organization?

Well, unfortunately, there is not a straightforward answer to this question. It depends on several things including your organization's digital commerce strategy, the broader organization structure, and cultural aspects such as cross-functional working behaviors.

We would encourage you to take stock of your current digital commerce organization focusing on your current structure, talent/external partner capabilities, and strengths and weaknesses. For example, strengths can include leadership belief in digital commerce growth opportunities, while a weakness could be underdeveloped cross-functional working.

The next step is to define or refine your organization's digital commerce strategy. Your strategy sets the critical context for what your digital commerce organization needs to look like to deliver commercial and capability growth ambitions. This will help to influence the most appropriate organization model to deliver your strategy.

Once you have decided on your target model it then becomes a journey of evolution to establish each model sequentially from left to right. For example, let's say your organization currently identifies as unstructured, and your target is a hybrid model. First, you would establish a centralized model, then evolve to a hybrid model. This will build business change activities incrementally as you build maturity and capabilities toward your target model.

What to do next

1. Identify current model - Identity which digital commerce model best aligns with your current state. Assess your current digital commerce organization across the structure, people, and ways of working.
2. Determine target model - Determine the most appropriate digital commerce organization model based on your digital commerce strategy.
3. Develop a roadmap - Define a plan that will evolve from the current model to your target digital commerce organization model. Ensure the plan sets out the activities and sequencing to achieve the target model.

Gartner clients can schedule an inquiry to discuss our research and work through the above points in more detail.

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