Do We Need a Digital Department At All?
When I began working on the Smart Insights Digital Transformation guide, I believed that the days of the digital department were numbered. After all, if digital integration was a true goal of a business, shouldn’t this department simply be merged into marketing and other ‘non-digital’ departments? I felt that we’d only created digital departments as a bolt on reaction to the changing landscape, and that over time different skills would simply be ‘absorbed’ into the rest of the business.
While this sentiment may run true amongst some readers, I soon found that this ideal has seldom been reached, and may never occur in many verticals. After all, it often seems that there will always be requirements for specific skills that need to sit within a specialist team. Rather than saying whether we ‘should’ or ‘should not’ have a digital department, there are varying ‘phases’ of digital integration.
Structuring Digital Marketing Activities
A common model for structuring digital marketing is based upon The Altimeter Group’s The Evolution of Social Business, which outlines five stages of social media integration.
The same phased approach can be seen where Neil Perkin writes for Econsultancy about these alternative digital marketing structures as explained below:
- Dispersed – an early stage reaction to digital staffing, whereby skills are dispersed throughout an organisation.
- Centre of Excellence – digital marketing personnel sit within one bespoke team, usually reporting to one Head of Digital.
- Hub and Spoke – a combination of a digital ‘centre of excellence’ (hub) and ‘spokes’ that sit within separate departments.
- Multiple Hub and Spoke – there are a number of separate digital hubs within departments, each with their own spokes in further business units.
- Holistic – digital knowledge is at a strong level throughout the organisation.
No respondents within Econsultancy’s report, and only 2.4% in Altimeter’s study, answered that a ‘holistic’ level of integration had been reached. This obviously casts doubt on my initial suppositions: digital departments are likely to stay for the considerable future.
Having a Digital Centre is Standard Practice
In many companies, the digital department exists is a separate entity to other divisions and is not wholly integrated into other departments – indeed, Altimeter’s study would suggest some 85% of companies are somewhere between stages 2-4 –all which demand a digital centre.
Why the Need for a Centre?
Establishing a digital centre can be a reaction against a decentralized (largely ungoverned) structure. With the appointment of a head of department, there is greater emphasis on establishing process and a move towards a formal structure. Of course, by bringing this centrally, there can be a number of inherent weaknesses, the clearest being:
- Potential barrier to effective multichannel marketing.
- Lack of shared learning in the wider organisation.
- Lack of focus on smaller business units.
So once a formal central structure is established, the next phase is to better integrate digital through the creation of ‘spokes’ – that is, digital skilled people sitting directly within particular teams. As demand progresses this model, these spokes may become larger, eventually with the ideal of the holistic stage being reached.
A Digital Centre Maybe Wholly Necessary
Since digital is such a different and complex arena to more established channels, it appears there will still be a requirement for groups of specialists to sit together and work almost as an agency for the rest of the company. Thus it may not be possible for some businesses to completely move away from having a digital centre.
Some digital skills are distinct specialisms, and do not always require many hires for the business to operate well in these areas. For instance, analytics and SEO are often deemed to be the realm of specialists (although you might now argue SEO has become more of a ‘generalist’ role). Additionally, some companies simply may not be able to afford the fixed costs and headcount necessary to evolve to a hub and spoke approach.
It is also possible that the centre of excellence functions as an ‘innovation hub’ while the more integrated spokes work on digital execution. For instance, the central hub researches and tests new approaches and technology, and while the spokes are responsible for digital change management.
It is quite clear that full or holistic digital integration may not be possible in large companies. But conversely, maintaining a separated ‘digital center of excellence’ presents its own pitfalls, particularly in widening company understanding of digital marketing. It’s not time we said goodbye to the digital department, and for many, it doesn’t look like it will happen any time soon either. How do you see it?