There is a bit of a tug-o-war going on in terms of where the MO function should sit in large organizations. On one side is corporate marketing. Corporate marketing believes that all MO functions are best kept as a centralized and shared services type of function. In contrast, field marketing believes they should own their own destiny and the technology to go with it. Who is right? It depends. There are pros and cons to each structure that we will examine in this article.
Pros and Cons of a Centralized Structure
Clearly, the number one benefit of a centralized structure in a large organization is the economies of scale. Within economies of scale, benefits include centralized vendor management, system administration and integration, data, and skills. The average marketing department uses north of 20 different pieces of technology – this number is much larger in big firms. Given the escalation in the number of disparate systems that need to be managed, a centralized vendor management program is common and very cost effective in many large companies. In addition, system administration and integration can be greatly “simplified” in a centralized model, thus cutting costs and gaining efficiencies.
Centralizing systems can also greatly help in centralizing data. As more and more large companies move to a customer-centric strategy, gaining that one view of the customer journey, no matter where they interact with the company, becomes a strategic imperative. Having a centralized architecture helps accomplish this extraordinarily difficult task. Finally, centralizing the skills required to manage and use all these systems can be a huge benefit to a company. Finding and growing marketing technologist talent is one of the biggest challenges facing marketers today. Creating a centralized talent pool has real benefits for a large company.
The major con of a centralized MO structure is a lack of local specificity and alignment in terms of market conditions, goals and agility. The lack of personalization can be a death knell for any marketing campaign because it fails to speak directly to the prospective buyer about specific challenges that need to be solved. Using a generic approach often results in an immediate “delete” response by the prospect because you have not shown an understanding of their specific business needs.
Also Read: How to Stop Your MO Group from Regressing
Pros and Cons of a Decentralized Structure
It is really hard to argue with the logic of economies of scale as described in the pros for a centralized structure. However, there are unique benefits to a decentralized structure including knowledge of and responsiveness to local markets. One of the most important roles of the field marketing team is their working knowledge of sales, local market conditions, and local customer idiosyncrasies. In contrast, corporate marketers are so often removed from the local reality, especially customers, they make decisions in a vacuum that do not always represent the best interests of local marketers. It’s this knowledge and results-orientation gap that best defines the benefit of a decentralized MO structure.
Of course, all the pros for the centralized structure are actually the cons for the decentralized structure. Besides the economies of scale, the biggest con is the lower skill level typically seen at a local level. This is a big con because a lower skill level sub-optimizes all the possibilities of leveraging technology and best practices to solve the prospective buyer’s problem.
A Tale of Two Global Companies and Their MO Approach
I’ve watched and worked with two different global companies as they embraced revenue marketing. They each made very different MO decisions based on their company environment and business conditions. In one company, they decided to centralize all systems and demand generation services. Their centralized MO team grew to about 75 people in six months. During this process, the field marketing organization was not happy. They believed they needed to own their “MO” organization and structure to best support field initiatives and goals.
The number one reason this company adopted a centralized MO had to do with the goal of getting all customer data centralized to create one view of the customer. With this over-arching company-wide strategy, centralizing the MO organization made sense. In addition, this global company truly functioned as one company, not a bunch of loose associations.
In contrast, another global organization took the opposite route. In this company, marketing automation and the relating MO structure was pushed down to field level. Each major field office had their own instances of marketing technologies they managed, integrated and used. This strategy was based on speed. In this particular company, enabling the field organization with their own mini MO organizations allowed for speed and agility, which was required in their marketing environment.
In this company, one reason for decentralizing MO had to do with how the company functioned. There were very different business units that acted like sole companies. So in this case, decentralizing MO made sense.
The Distributed MO Structure – A Shared Services Capability
In addition to the two examples already described, there is a third example – the distributed MO capability. The distributed MO capability sets up the best of both worlds. It begins with corporate centralizing MO functions such as vendor management, system administration and integration, data and skills, but doing so in a shared services model. Corporate sets up best practices and governances that can be accessed by field marketing. At the same time, field marketing has their own mini MO organization that allows them to optimize local results. There are many different organizational structures in MO as a shared services capability. The key to success is to allow for local independence while establishing easy access to a very high level of expertise in people, data and systems.
Follow the Bouncing Org Chart
As B2B marketing continues to accept new responsibilities in terms of digital transformation, customer centricity and revenue generation, the B2B marketing org chart will continue to evolve. We’ve seen the fast growth of the MO organization as a logical response to marketing’s need to use technology to drive change and business impact. Where the MO capability lives is a critical component of marketing success. I’ve seen all kinds of models work so it’s not the model itself that helps predict success. Rather, success is predicted based on how the MO organizational model serves the needs of marketing and of the company. So, where does MO live in your company and is it in the right place?
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