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Where should an e-Commerce team report to?

April 26, 2019 at 10:49 AM by Rui Francisco

The importance of e-Commerce is gradually being recognized by more business organizations. Looking at the market and consumer evolution – “currently, four in ten Portuguese citizens buy online” [1] – management teams recognize that it’s a channel that can’t simply be ignored.

Author: Rui Francisco | Reading time: 3 minutes

Blog - Onde deve reportar uma equipa de e-Commerce?unsplash-logoVictoria Heath

After recognizing the importance of investing in the online sales channel and after defining the business model to follow, companies also quickly have to define how to setup the structure and team that will lead the e-Commerce endeavor.

The discussion usually touches on topics such as:

  • Will the resources reside in-house or will they be outsourced?

  • Will resources be totally dedicated to e-commerce or will they be shared across functions?

  • Which department should the e-Commerce team report to? Sales, Marketing or should it be setup as its own department?

Answers will vary according to the reality of each company and its strategic ambition for the online sales channel. To get to the right answers, it’s important to understand the advantages and disadvantages of the different options and how they fit the reality of each organization.

Let’s take a close look at the question of functional reporting.

A corporation that has the strategic objective of establishing e-Commerce as an additional sales channel, focusing primarily in variables such as revenue and market share, will more easily have success and KPI alignment if the e-Commerce team members report to the Sales organization.

On the other side, if the main strategic objective of the e-Commerce team is to have an integrated brand positioning that emphasizes factors such as innovation and communication strategy, then reporting through the Marketing department improves the chances of achieving these objectives. The risk will be a smaller focus on commercial aspects such as sales and market share, or on operational concerns.

There are also cases in which companies define a role of extreme strategic importance for e-Commerce and the team reports directly to the executive level. In this model the e-Commerce leadership has direct access to top management, without first having to go through filters that make the e-commerce priorities get stuck on the lower levels of the organizational pyramid.

In models where e-Commerce reports to Sales, its common that the larger size of the more established sales channels dilute the needs of the digital channel. In models where reporting goes through Marketing, brand considerations such as the investment in a new product launch, may curtail the resource needs of e-Commerce. Reporting to the executive direction can help mitigate that more traditional agendas of Sales and Marketing teams don’t constantly block the progress of e-Commerce.

However, it’s important to recognize that even in an autonomous reporting model, no e-Commerce team will ever be 100% independent of the rest of the organization and will never be successful if it works in a silo. From product coordination with the Logistics team, to pricing architecture with the Sales team and digital marketing strategy with the Marketing team, many are the touch points required to ensure that e-Commerce grows healthily within a company.

Additionally, independently of the reporting model, it’s always important to have a business owner that is fully responsible for the e-Commerce agenda, with objectives and KPIs focused on the development of online sales. These objectives should also be aligned with the strategic objectives set by the leadership for the channel and fully supported by the executive team.

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In the e-Commerce Management 360º course, we will discuss these and other relevant questions for the success of an e-commerce business. The program has a cross-functional approach, it’s lectured with a practical tone and is directed at executives to whom e-Commerce is a business imperative.

Reference

[1] e-Commerce Report CTT 2018

Topics: Digital & Tecnology, Opinion Articles, Marketing & Sales

Rui Francisco

Published by: Rui Francisco

Director of E-Commerce @ PepsiCo

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