Tech-enabled multi-channel 1:1 customer engagement has forced marketing managers to deal with an unforeseen complexity of data, technology and a multitude of content variations. Having the required technical competence spread across the company is not efficient. Marketing operations today require new management skills, controls and a hands-on approach – and a new organisational structure. This is the main reason why CMOs all over the world are in the process of centralising marketing operations.
Many of Avaus’ customers are good examples of this trend. They are centralising critical parts of their marketing functions into a Marketing Center of Excellence. The centralised marketing function is focusing on servicing the rest of the organization and P&L:s with marketing technology, data management, and operations of multi-channel programs. The same criteria that apply to IT, have become relevant for marketing. Security, scalability, cost efficiency, require centralisation. You don’t want to run Marketing as a decentralised, independent ad-hoc organisation anymore. For the same reasons, allowing a multitude of different agency partners dealing with data-driven marketing topics, is not a preferred option. Centralisation and pooling of service providers are therefore also on the to-do list of many CMOs today.
What is a Marketing Centre of Excellence (CoE)?
A marketing Centre of Excellence (CoE) is a centralised function or team, that takes care of (often data/technology-driven) marketing activities. It is a support function, and it serves the different business areas of an organisation. You could describe it as an internal agency, or the facilitator of working with selected key agencies. Typically it includes at least some of the following capabilities:
The challenge – how to start building a CoE?
Building a CoE starts with pooling the existing resources and creating a formalised central organisation. First, you need to identify the team members within your organisation that are able to work in this new, technically challenging environment. Secondly you need investment in training and revamping the know-how of the team. The process will take at least 12-18 months. Most marketing organisations do not have all the required competencies in-house, and will need to either recruit, insource or outsource part of the CoE functions and roles. The different approaches for building a CoE are detailed in the chart below, with Pros and Cons listed for each, and a recommendation of which organisations should choose which option.
The preferred option will be a hybrid of several approaches. Handpicking the trusted skilled employees from the current organisation, recruiting, strengthening the transformation journey by insourcing key strategic competencies and also outsourcing bulk production might constitute the perfect answer. For companies that can build the CoE from scratch, the optimal structure would likely be a hybrid between recruiting and insourcing, where the share of insourced support will go down over time, transforming towards an outsourcing model – once bulk tasks are identified and a process for efficient production has been defined.
If you need help with building your own Centre of Excellence, please contact me: firstname.lastname@example.org
CEO of Avaus