In the last 3 weeks I have met with a number of Multi-National Companies (MNC) both in Singapore and in Shanghai all faced with the same challenge: lack of digital talent and the impact it is having on their Business strategy.
Many of those MNC are realizing the opportunities for revenue growth, higher gross margins and a lower cost base that a successful eCommerce strategy will offer them. Many of the same executives also realize that they are under-invested or lack the capabilities within the organization to drive that growth.
Some of them fall into the trap of over confidence because they as they are online consumers with experience of e-retailers such as 360go.com, taobao.com or Amazon.com that this provides them sufficient experience to shape or guide their company’s eCommerce strategy. Useful though it is to have personal insight or experience as a consumer this of course is no the same as having experience of setting up and running a multi-million dollar eCommerce business.
Many are smart enough to hire consulting companies who do have that experience to help them formulate their strategy. But that still does not overcome the challenge of how to run the business once it is set-up. And this is where the train starts to come off the tracks. There is simply not enough experienced digital talent – at all levels – to meet the growing demand.
This gap is not as severe at the graduate entry level of the organization. The new “digital” employee entering the workforce or with perhaps 2-3 years employment experience are at the very heart of this quiet digital revolution. Their whole life is online and having known nothing different, they merely lack the corporate experience and confidence to drive the required solution home.
The problem exist in the middle to senior management roles – those accountable for the strategy or execution of that strategy. There are many very intelligent, very smart and very experienced people in this group. But what they lack is experience of setting up and running digital business. And whilst the difference initially appears to be semantic, the reality is more fundamental.
Digital business have a different pace, culture, way of working than traditional businesses. They need to be more agile; they need to be more directly engaged with their customers; they need to understand that the customer “owns” their brand; that there employees are motivated differently and need to be managed differently. Furthermore what needs measuring, how and why they respond to situations and what Levers they can pull to drive a change in performance are fundamentally different form their prior experience.
In China, where the growth in eCommerce is akin to the dotcom revolution of 10 years ago, the situation is even more challenging. Not only is there a more formal and traditional business culture now being challenged by the more open style of the dotcom, but the need for talent that both speaks the language, understands the cultural differences (for example Payment by cash on arrival of goods) and have online experiences, makes the challenges even tougher.
One increasingly attractive solution is to look to organizations that can provide a “turnkey” solution. Collaborating with an organization that can Build-Deliver-Operate (BDO)” your eCommerce business, usually for a combination of fixed fee and revenue share, has a number of advantages.
Firstly the capital investment is reduced with most of the associated fess sitting in operating costs and theoretically paid or out of the results delivered y the agreement.
Secondly the talent is already in place, which means there is little or no delay in finding and hiring talent that could otherwise impact the project by 6-12 months.
Lastly all the experience in the middle to senior tiers already exists. It provides ample time and opportunity to retrain your existing talent to be more “digital”, ready to take over the running of the operation when the BDO contract expires.
