The Power of Silos for Digital Transformation

The biggest misconception in digital transformation is that all silos must go, but sometimes they just work better than just putting everything together. Once you realize that silos have certain values and strenghts, you can build an organization that is able to create digital products your customers continuously love to use.

When developing digital products such as a platform or a webshop, the experience your customer has with your digital product, is central. It must be personalized, relevant and extremely friendly to use in order to generate more online sales and improve services.

To make all this possible, everyone has been claiming for years that all silos must be demolished. By merging employees, technology and processes you can reduce costs, but also collect data centrally, create a uniform customer view and continue to improve every phase of the customer journey. Yet after all this time of decrying silos, we still come across them in practice. This is because they also have their added value: silos enable management, help shape the corporate culture and you can easily experiment with them to accelerate your business. Sometimes you just need frameworks, but when exactly? 

Centralisation and decentralisation

Centralizing or decentralizing business units creates a continuous field of tension. Every organization will have to deal with this over time, whether it concerns departments, business units or regions. In recent years, all the focus has been on centralization: small companies are bought up by large companies and regions are interacting at more and more levels. The major trends of globalization and digitization are driving this because centralization offers the necessary economies of scale, data and consistency in the customer relationship.   

However, with centralization you are only as strong as the weakest link. Responsibility can become diffuse, employees can feel less involved, and fluency can come under pressure. One size fit nobody. Anyone who has ever entered a large organization may know that feeling: what exactly am I going to do here? How will I fit into this organization? 

The countermovement to decentralization creates cohesion, mutual competition, and the space to experiment build your own business case on the other hand. This is because often a head quarter simply does not move fast enough to be able to respond to local developments or because relevant domain knowledge is missing. Setting up an organization without silos is therefore not self-evident. How do you determine which organizational form suits you best? 

Setting up an organization around the digital product

The core of an organization starts with your proposition: the extent to which your products or services match customer needs and the way in which you deliver them: physically, digitally or both. Only when you can build that bridge and deliver something of added value as a company, you have a right to exist. This, therefore, requires an outside-in perspective with which you can evaluate your own relevance. 

Then you will investigate how you are going to realize your proposition and which digital product you can best use for this: an e-commerce environment, a marketplace, a platform or a B2B portal? How do you define, design and build that digital product as an organization? Which department does what exactly? Which dependencies and crucial information flows make the digital product possible? In short: what are the so-called product success criteria per step in the customer journey? This way you learn whether the success is 100% dependent on the entire organization or whether it comes largely from a specific department that you want to empower. In SQLI's practice, we typically do a two-day workshop for this purpose, in which we fully map out the triangle of organisation, technology and customer. 

The next step is to see where you want to go and how you will get there as an organization. The goal is almost always to start selling products or services online or to increase the existing online turnover. The business case for this is silo-driven because just think about it: for example, it comes from a marketing department that wants to grow and needs to bring in new customers or an IT department that needs to use an already purchased solution or improve the availability of the platform. And who pays, decides. That's where you'll immediately notice the us-versus-them thinking that comes with silos. The crux is to recognize that you are jointly responsible for the success of the digital product; every link must be strong. This reciprocity requires common objectives that unite in return. 

Success factors in the customer journey

The translation of the organization into added value in every phase of the customer journey, has many challenges. Ultimately, it's about creating a consistent, scalable experience across the entire journey. Only then does a one-off interaction become a lasting customer relationship, will make sure the customer comes back and the customer journey becomes a spinning wheel. If you miss a crucial step in a phase of the customer journey, the entire product can suffer from it. With the insight that silos simply exist and can also add value, you can solve many problems. 

There are many success factors that can be mentioned in the practice of making digital products successful. We often see the following four factors recurring and I would like to explain these:

1. Relevant product information and content

A party is investing heavily in the design and development of a new webshop, but the marketing budget and available staff are too limited. Due to the lack of the marketing voice in the process, the traffic is lacking and the webshop cannot fully prove itself.

2. Role of account and sales managers

Especially with B2B companies, traffic alone is not enough: the account managers and office staff must also promote e-commerce. However, if they see it as a threat, they will facilitate your rollout anything but optimally. The solution for this is to set up an onboarding flow based on internal needs. Only when you translate the new site into practical convenience, the necessary support will be established and employees fulfil will their new role in a better way.

3. Gamification

The internal competition that is ingrained in silos can help you achieve your goals, especially in an international rollout. Once you have convinced all teams, you can then steer the mutual competition towards achieving online turnover and a number of online customers. After all, it is the same digital product for all countries. Set up a dashboard that provides quick insights and helps the organization to get more value from online investments.

4. Train the trainer

An international website must be managed locally in order to be relevant locally. A train-the-trainer method helps to use your marketing automation, content marketing and customer experience tools optimally. This ensures that the new platform is adopted locally and thus actually contributes to the business.

The promise of digital transformation

One thing is certain: digital transformation costs money and there is no guarantee of success. But you can influence the factors that shape your success: the organization, the technology you use and the final digital product. Getting your organization on board is the most difficult of these. On the one hand, everyone must realize that you are jointly responsible for your digital success. On the other hand, silos also have added value. When you realize that, you can really deliver on the promise of digital transformation. 


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