Friday 15 Podcast

Should Global B2B Companies Centralize or Decentralize eCommerce?

Brian Beck and Andy Hoar on how large global B2B companies should organize their ecommerce functions, which capabilities benefit from centralization, and why the right answer is usually a messy hybrid.

Friday 15 Podcast

Key takeaways

  • A LinkedIn poll of B2B practitioners found that 64% favor centralizing ecommerce functions for large global companies, driven by the benefits of shared infrastructure, vendor leverage, and centers of excellence.
  • Tech infrastructure should be centralized to avoid a hodgepodge of customized systems, reduce technical debt, and negotiate better contracts with vendors.
  • Data and analytics benefit from centralization because companies cannot have data scientists in 14 different countries all leveraging best practices independently.
  • Marketing and customer support require some localization to account for language, customer preferences, and regional differences, even when the underlying tech and data are centralized.
  • The optimal organizational design is often the messy one, a hybrid unique to the company's talent profile, market, and business model, rather than a pure centralized or decentralized approach.

Google ruled a monopoly, but the remedy may arrive too late

Brian opened with news that the FTC ruled Google a monopoly for paying to be the default search engine on browsers like Safari and Firefox. Andy drew parallels to the Microsoft case in the 1990s, when Microsoft paid PC manufacturers like Compaq to embed Internet Explorer on desktops. The finding noted that Google achieved dominance because it had the highest quality search engine, which earned the trust of hundreds of millions of users.

They got the best mouth trap out there by the finding of fact.

Andy Hoar, Master B2B

The irony is that Microsoft, which owns Bing, was a key witness against Google. Andy noted that by the time any remedy takes effect, the search landscape may look entirely different. ChatGPT and other AI tools are already changing how people find information, and Google’s search dominance may erode on its own.

The centralization question for global B2B companies

The main topic was whether ecommerce functions for large global B2B companies with diverse lines of business should be centralized or decentralized. Andy explained why the question matters: the way a company designs its team produces certain outcomes. A centralized team gets one set of results; a decentralized team gets another. At a previous Master B2B summit, participants drew their org charts on paper. The hosts collected 96 different versions.

Factors that drive the decision

Several factors shape whether centralization or decentralization makes sense. Local customer preferences and behaviors matter: if different markets have different languages, currencies, or product requirements, some localization is unavoidable. Brian recalled working with Epson across 18 countries, where product data had to accommodate local power configurations. Service and installation needs also push toward localization, while fulfillment logistics may require a mix of central and local distribution.

The most important factor, in Brian’s view, is talent. Building a center of excellence requires concentrating expertise in one place. If digital and ecommerce talent is available in certain cities and wants to live there, centralizing functions in those locations makes hiring easier.

What should be centralized

Tech infrastructure is a strong candidate for centralization. When companies acquire brands and inherit legacy systems, or when different markets have different platform instances, the result is technical debt, maintenance headaches, and no leverage with vendors. A single centralized platform avoids these problems and allows the company to negotiate better contracts.

Data and analytics also benefit from centralization. Companies cannot have data scientists in 14 different countries all working independently. Centralizing data allows teams to collaborate, apply best practices, and harness information more effectively. Andy drew an analogy to finance: companies centralize financial tracking because it flows through the organization, and data flows the same way.

What may need localization

Marketing requires some decentralization. SEO, paid search, and analytics expertise can live at the corporate level, but messaging, language, and campaign execution often need to be local. Brian mentioned the classic example of the Chevy Nova, whose name translates to “does not go” in Spanish, as a reminder that local knowledge matters.

Customer support is a hybrid question. Offshoring, nearshoring, and onshoring have all been tried. The answer depends on whether customers expect local language and local understanding of workflows. Operations and fulfillment are inherently local in many cases, though common goods can sometimes ship from a central distribution center.

The messy hybrid is often optimal

Ian Heller, founder of Distribution Strategy Group and formerly of HD Supply, summed up the consensus.

The optimal solution is the messy one, which is often the case, a hybrid that is unique to the company based on its talent profile, market, and business model.

Ian Heller, Distribution Strategy Group

Tim Peterson of Spear Digital recommended centralizing at the top with country, area, or brand leaders around the organization, which gives both local expertise and global cost savings. The LinkedIn poll showed 64% of practitioners favoring centralization, though the hosts noted this may reflect confirmation bias among respondents who already work in centralized structures.

Control, talent, and the case for centralization

Andy closed by noting that beyond cost savings and vendor leverage, centralization offers control. Decentralized teams can run 25 different experiments, but they can also create 25 different messes. Talent remains the overriding driver. If building a center of excellence is the goal, concentrating people and expertise in one place is usually the right starting point, with selective localization where customer needs demand it.

Frequently asked questions

What factors should B2B companies consider when deciding whether to centralize ecommerce?

Key factors include the extent to which the business is driven by local customer preferences and behaviors, whether the product requires local service or installation, how fulfillment is handled, and where talent is located. If customers in different markets have distinct needs or if products require local service, some decentralization is necessary. If the goal is to build a center of excellence with shared expertise, centralization has clear advantages.

Which ecommerce functions should be centralized in a global B2B company?

Tech infrastructure and data analytics are strong candidates for centralization. Centralized tech avoids the mess of 25 different platform versions, reduces technical debt, and gives the company leverage when negotiating with vendors. Centralized data allows data scientists to work together and apply best practices across markets. Finance is another area where centralization is standard, and data can be thought of in similar terms.

Which ecommerce functions should be decentralized or localized?

Marketing and customer support often need some localization. Marketing must account for language differences, cultural preferences, and market-specific messaging. Customer support may need to speak the local language and understand regional workflows. Operations and fulfillment typically require local presence, though common goods can sometimes be shipped from a central distribution center.

What is the right organizational model for global B2B ecommerce?

Most practitioners agree the right answer is a hybrid. Ian Heller, founder of Distribution Strategy Group, put it this way: the optimal solution is the messy one, a hybrid unique to the company based on its talent profile, market, and business model. A pure centralized or pure decentralized approach rarely fits the realities of a global business.

Why does talent drive the centralization decision?

If the best ecommerce and digital talent wants to live in a certain location, the company may need to centralize functions there to attract and retain them. Spreading functions across many markets can make it harder to build deep expertise and may force companies to hire in locations where sophisticated talent is less available. Building a center of excellence often requires concentrating people in one place.

How does centralization affect vendor negotiations and costs?

Centralizing tech infrastructure gives companies leverage when negotiating contracts with platform vendors and service providers. A company with 25 different platform instances across markets negotiates one-off deals and cannot benefit from bundled discounts. A company with a single centralized instance can negotiate better terms and avoid the costs of maintaining multiple customized systems.

Sources & methodology

  1. Friday 15 Podcast, Master B2B
  2. Master B2B LinkedIn poll on centralization, August 2024
  3. Ian Heller, founder of Distribution Strategy Group
  4. Tim Peterson, CEO of Spear Digital
Andy Hoar Andy Hoar
Co-Founder, Master B2B

Andy is a Co-Founder of Master B2B, founder of Paradigm B2B and author of the book Bot2Bot: The New Future of B2B Commerce. Andy is one of the leading global authorities on B2B commerce strategy.

Brian Beck Brian Beck
Co-Founder, Master B2B

Brian is a co-founder of Master B2B, Managing Partner of Amazon agency Enceiba, and author of the book "Billion Dollar B2B Ecommerce." Brian has also been C-level digital commerce executive with two decades of experience.

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