An E-Commerce Organisational unit is the organisational structure with which a company operates its online business. The basic parameters and requirements for this organisational unit are usually defined within the framework of an E-Commerce distribution strategy or the individual channel strategies. Regardless of which of the three E-Commerce pillars (Online Marketplaces, Third Party eRetailers, Direct Sales & Affiliates) are actively being pursued by a company, certain basic rules exist for ensuring high performance. According to our experience, the most important of these a is that a global, dedicated E-Commerce Organisational unit is set up for the successful pursuit of online business. The two main aspects of this are as follows:
- Global: A characteristic of online commerce that is easily apparent but typically goes unconsidered from an organisational perspective is that it essentially has no national boundaries. Particularly in the case of simplified international trading within Europe, this means that end consumers, presented with an ever-greater decline in shipping costs, perceive cross-border trade to be completely normal – if they even notice it at all. What is true for end consumers also applies to international purchasing organisations, such as those from large online marketplaces like Amazon. In the case of cross-border sourcing, the manufacturer’s organisational structure is exploited by buyers, who purchase from different country organisations (e.g. Poland, Austria) depending on the destination country (e.g. Germany). Against this backdrop, a global E-Commerce Organisational unit is needed to control and coordinate online business in the interests of the company as a whole. Isolated solutions that attempt to dock country-specific online units to existing matrix-like organisational structures can only ever serve as transitional solutions. They may serve the interests of individual country organisations, but do not contribute to the overall success of the system.
- Dedicated: In many companies, online business accounts for a smaller share than brick-and-mortar business, at least initially. Companies tend to approach the online segment as an additional business area that can be accommodated for with the existing organisational structure and resources. Experience shows, however, that systematic, successful E-Commerce development can only be achieved with a dedicated organisational unit and corresponding resources. Existing sales forces typically lack both the necessary global reach (see above) and resources (in regard to specific e-commerce kn0w-how) to develop the business quickly and sustainably.
In simplified terms, a global, dedicated E-Commerce Organisational unit consists of the three core areas – as shown in Figure 1:
Figure 1: Simplified schematic representation of a global E-Commerce Organisational unit
- E-Commerce sales: Depending on the E-Commerce distribution strategy, the roles of different channel-specific key account managers can be combined. Further dedicated sub-organisations may exists depending on the size of the individual channels (e.g. an Amazon unit with vendor account management).
- Digital marketing: Central coordination of online marketing activities. This foundation may be modified slightly for specific channels, but does not deviate significantly from a set of key tasks.
- Product data management: As an interface between product management and marketing, this section is responsible for the central provision and administration of product data required for various online channels.
This basic structure is to supplemented according to the respective requirements of the online business (according to a pre-defined e-commerce distribution strategy). Broadly speaking, however, an effective E-Commerce Organisational unit must cover the functions shown in Figure 2. Depending on the degree of maturity of E-Commerce operations and the associated organisational structure, a number of functions can be assigned to a single position, depending on the extent to which task differentiation with different resources is required.
Figure 2: Necessary functions and resources of an E-Commerce organisational unit
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Markus Fost, MBA, is an expert in e-commerce, online business models and digital transformation, with broad experience in the fields of strategy, organisation, corporate finance and operational restructuring.Learn more