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Ali Zhongtai was completely split and Daniel Zhang took the initiative to change

author:E-commerce newspaper
Ali Zhongtai was completely split and Daniel Zhang took the initiative to change

Ali Middle Office spin-off

Ali's middle platform was completely demolished.

In 2015, Daniel Zhang, who had just taken over as CEO of Alibaba Group, proposed the "small front desk, large middle office" middle office strategy, which led the trend for a while, and the middle office concept quickly spread into the most popular organizational method in the Internet industry.

Eight years later, he is already the chairman of the board of directors of Alibaba, and he Daniel Zhang has put forward a new proposition for the middle office strategy, and the middle office that once represented Alibaba's organizational form is about to become history.

Ali Zhongtai was completely split and Daniel Zhang took the initiative to change

Before discussing the impact of the middle office split, it is first necessary to clarify what the middle office concept is.

First of all, the concept of the middle office is compared to the front and back office. The background refers to all kinds of basic underlying data, while the front desk is the products that users usually come into contact with, and Taobao Tmall, Alipay and other projects can be attributed to the front desk.

In the process of R&D, landing and development of these projects, there will be many common business needs, such as Alipay and Taobao have the need for search functions. For Alibaba, developing a search system specifically for Alipay and Taobao is expensive and inefficient. As a result, the technology middle platform came into being, avoiding the reinvention of wheels by R&D personnel, and providing a common underlying framework and technical support for Alibaba's various businesses.

Alibaba's middle office is divided into two parts, one is the technical middle platform, and the other is the organizational middle office.

Alibaba's middle office strategy was first proposed in the technology field and gradually expanded to the business and organizational level.

At the technology level, Alibaba has built a unified distributed architecture and data platform, providing unified development tools and technical standards to support rapid development and innovation across business lines. At the business level, Zhongtai realizes information sharing and business collaboration by connecting data and processes between various business lines, and integrates various functional businesses into the group.

The technical middle office has always been headed by Alibaba's CTO, the chief technology officer. After this split, the data middle office and business middle office under the technology center have their own places.

According to "LatePost", the "data middle office" became an independent subsidiary Love Orange Technology, with Wu Zeming, former CTO of Aliyuan, as CEO. In the future, the new subsidiary will need to develop its business and markets independently and be responsible for its own profits and losses.

The marketing, trading and other teams of the "Business Middle Office" are fully or partially transferred to Taobao Tmall Business Group. Taotian Group has begun to enter formal operation according to the new organizational structure on April 14, with a complete and independent structure of human and financial affairs, and achieving comprehensive independent operation and management.

At the organizational level, the middle office strategy changes the traditional organizational structure, building cross-departmental teams and cooperation mechanisms to promote innovation and collaborative work. Therefore, Alibaba CXOs, including the Chief Customer Officer, Chief Talent Officer, Chief Financial Officer, Chief Marketing Officer and Chief Risk Officer, are all part of the organization's middle office.

Ali Zhongtai was completely split and Daniel Zhang took the initiative to change

After this adjustment, customer service, human resources, finance and other departments were basically merged into Taobao Tmall Group, fully serving Alibaba's e-commerce territory.

In addition, most of the marketing department was transferred to Alibaba Cloud, and the middle office team led by Chief Risk Officer CRO Zheng Junfang was the most complicated to split, some followed Zheng Junfang to Alibaba Cloud, part of the team stayed in Taobao Tmall Group, and some will form security companies and operate independently in the future.

Between construction and demolition, it is a change of the times. On March 28, Daniel Zhang announced the biggest moment of organizational change in Alibaba's 24-year history, and the change in Zhongtai was also expected and reasonable.

Ali Zhongtai was completely split and Daniel Zhang took the initiative to change

The past and present of Nakatai

The story of the middle office sweeping China's Internet industry may begin in distant Finland.

In 2015, with the help of SoftBank Son, Ma Yun took Ali colleagues to visit a legendary game company, Supercell.

This game company, which is called Super Cell in Chinese, naturally has its own unique place, which will make the richest man in China and Japan green-eyed. In 2012, Supercell launched the blockbuster game "Clash of Clans", which quickly became popular around the world. Son's SoftBank and Japanese game publisher GungHo quickly injected 51 percent into the game company, spending $1.51 billion.

With excellent products in the front and sufficient financial support in the back, the game company quickly became the explosive game factory of those years. In the year that Ma Yun visited, its total number of employees was still hovering around 200, but it easily reaped $2.326 billion in revenue and a net profit of $964 million.

On average, one employee generates tens of millions of revenues.

Ma Yu noticed an unusual part of their corporate organizational process: the front desk was a separate game development team, with streamlined members and a free direction, and each team was the head of an independent game product. The back office is the technical department responsible for developing common materials and algorithms, their work is more repetitive, and their output serves the front office department, which facilitates rapid trial and error.

In this sense, this back-office that can precipitate, reuse enterprise capabilities and provide support for the front office is the blueprint for the construction of the middle office later. The goal of building a middle office is to improve the overall efficiency of the enterprise through reuse.

Prior to this, Alibaba naturally formed corresponding needs and exploration results in the process of enterprise development, and it is generally recognized that the predecessors of Alibaba Zhongtai were the "Shared Business Division" and "Data Platform Department" established in 2009. But it was not until 2015 that the importance of the middle-office strategy was emphasized by Ali speakers such as Jack Ma and Daniel Zhang.

The reason is simple, Ali in 2015 has grown into a behemoth, and with the dividend of mobile terminals, it continues to maintain an amazing market growth rate. Some large companies that waste resources are also gradually revealed at this moment.

Therefore, in this year, Alibaba proposed the big middle office strategy, aiming to achieve the centralization and sharing of resources by building a unified middle office platform to improve the efficiency and innovation ability of the organization.

The middle office strategy has indeed solved many problems such as business fragmentation, information islands, and duplicate construction in the development process. Through the construction of the middle office, the data, technology and resources of Alibaba's various business lines have been integrated and shared.

With Alibaba's expansion strategy, the business territory covers e-commerce, technology, entertainment and other fields, and the effects of the middle office continue to appear: on the one hand, improve the efficiency of resource utilization, reduce development and maintenance costs; On the other hand, Alibaba can respond faster to market changes and launch new products, improving Alibaba's flexibility and agility in the mobile Internet era.

Some media reported that "in 2020, Alibaba's chairman Daniel Zhang said in an internal sharing that bayonet fighting on the front line is a thing of the past, and the big data system based on the middle office is equivalent to an information hub, which can strategize and win thousands of miles." ”

Ali Zhongtai was completely split and Daniel Zhang took the initiative to change

"In the five years since the start of the construction of the middle office, the cost of each business has been reduced several times."

But in the middle of 2020, the rumors of Ali's splitting of the middle platform were endless, and the saying of "making a thin middle platform" began to emerge.

It is reported that new retail businesses such as Hema Xiansheng, whose discount method and logic are very different from traditional e-commerce, if applied to the middle office capabilities developed for Taobao Tmall, many additional adaptations need to be made, and its efficiency is too low.

Alibaba's huge business line also poses a high challenge for the development capabilities of the middle office, and the edge business puts forward a demand to the middle office, which may have to wait in line for two months to hear back. It is expected that waiting for feedback from the middle office is not as efficient as building a self-built technical team.

So at the end of the year, Alibaba's middle office strategy began to shift to "diversified governance", giving each business greater flexibility and freedom.

Ali Zhongtai was completely split and Daniel Zhang took the initiative to change

epilogue

"When the company grows bigger, instead of encouraging collaboration in various ways, it is better to really use the market method to choose both ways."

At the moment of the "1+6+N" organizational structure change, Alibaba has once again come to the forefront of the industry at the level of enterprise management.

Ali Zhongtai was completely split and Daniel Zhang took the initiative to change

Re-examining the positioning and development direction of the middle office business is essentially re-evaluating the strategic environment of the entire Alibaba Group. For the purpose of re-evaluating market demand, competitive landscape or internal organizational structure.

For Alibaba, the spin-off of the middle office business can now better focus on the core e-commerce business represented by Taotian Group. For those diversified business units, after the split of the middle office, they have gained more freedom to explore the possibility of new formats.

More importantly, allowing each business group to have a complete technical and functional structure is a necessary preparation for the independent spin-off and listing of Alibaba's businesses in the future.

After the split of the middle office, Alibaba ushered in transformation opportunities at the two levels of demand satisfaction and efficiency improvement. A more decentralized Ali means greater room for imagination.

Author | Wu Xin

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