Alibaba Central Taiwan Completely Split, Zhang Yong Proactively Seeks Change

Tech 2023-05-17 12:28:08 Source: Network

Alibaba Zhongtai SplitAli's central platform has been completely dismantled.In 2015, Zhang Yong, who had just taken over the position of CEO of Alibaba Group, proposed the "small front desk, large middle desk" middle platform strategy

Alibaba Zhongtai Split

Ali's central platform has been completely dismantled.

In 2015, Zhang Yong, who had just taken over the position of CEO of Alibaba Group, proposed the "small front desk, large middle desk" middle platform strategy. Alibaba led the trend and the concept of middle platform quickly spread to become the most popular organizational method in the internet industry.

Eight years have passed, and Zhang Yong, who is already the chairman of Alibaba's board of directors, has put forward new ideas for the Middle Taiwan strategy. The Middle Taiwan, which once represented Alibaba's organizational form, is about to become history.

When discussing the impact of the split of the central platform, the first step is to clarify what the concept of the central platform is.

Firstly, the concept of the center is proposed compared to the front and back ends. The background refers to all kinds of basic underlying data, while the foreground refers to the products that users usually contact. Items such as Taobao Tmall and Alipay can all belong to the foreground.

In the process of R&D, implementation and development of these projects, there will be many common business needs. For example, Alipay and Taobao both have search function needs. For Alibaba, developing a search system specifically for Alipay and Taobao is costly and inefficient. So the technological platform emerged,Avoiding R&D personnel from repeatedly building wheels, providing a common underlying framework and technical support for various businesses under Alibaba.

Alibaba's center is divided into two parts: the technical center and the organizational center.

Alibaba's mid stage strategy was first proposed in the technical field, and later gradually expanded to the business and organizational levels.

At the technical 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 various business lines.At the business level, the middle desk achieves information sharing and business collaboration by connecting data and processes between various business lines, and integrates various functional businesses into the group.

The technical center has always been the responsibility of Alibaba's CTO, the Chief Technology Officer. After this split, the data center and business center under the technology center have their respective destinations.

According to LatePost, "Data Center" has become an independent subsidiary of iOrange Technology, with former CTO of Alibaba, Wu Zeming, serving as its CEO. This new subsidiary needs to independently expand its business and market in the future, and be responsible for its own profits and losses.

The marketing and trading teams of the "business center" have been wholly or partially transferred to Taobao Tmall Commercial Group. Taotian Group has entered formal operation according to the new organizational structure since April 14th, with a complete and independent system of human resources, finance, and management, achieving comprehensive and independent operation and management.

The composition of the organizational middle stage is more complex. At the organizational level, the middle stage strategy has changed the traditional organizational structure and built 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, belong to the organizational middle office line.

After this adjustment, customer service, human resources, finance and other departments have basically merged into Taobao Tmall Group, fully contributing to Alibaba's e-commerce landscape.

In addition, most of the marketing departments were transferred to Alibaba Cloud. The middle office team led by chief risk officer, CRO Zheng Junfang, was the most complicated. Some followed Zheng Junfang to Alibaba Cloud, some stayed in Taobao Tmall Group, and some will set up security companies to operate independently in the future.

Between construction and demolition, it is a change of the times. On March 28th, Zhang Yong announced the biggest organizational change in Alibaba's 24 year history,The changes in the central platform were also expected and reasonable.

The Past and Present Lives of Zhongtai

The story of China's internet industry being swept by Taiwan may start from distant Finland.

In 2015, under the guidance of Sun Zhengyi from Softbank, Jack Ma and his colleagues from Alibaba visited a legendary gaming company, Supercell.

This game company, which is translated as Super Cell in Chinese, naturally has its unique features that make the richest people in China and Japan more eye-catching. In 2012, Supercell launched the popular game "Tribal Conflict", which quickly became popular worldwide. Sun Zhengyi's SoftBank and Japanese game publisher GungHo quickly invested 51% in the game company, spending $1.51 billion.

With outstanding products at the forefront and sufficient financial support at the back, this gaming company quickly became one of the best-selling gaming factories of those years. In the year Jack Ma visited, its total number of employees was still hovering around 200, but it easily earned $2.326 billion in revenue and a net profit of $964 million.

On average, an employee generates revenue of tens of millions.

Ma Yu noticed an unusual part of their organizational process in the enterprise: the front desk is an independent game development team, with streamlined members and free direction, each team being an independent game product leader. The backend is the technical department responsible for developing common materials and algorithms, and their work is more repetitive. Their output serves the frontend department, making it convenient for quick trial and error.

In this sense,This backend, which can precipitate and reuse enterprise capabilities, and provide support for the front end, is the blueprint for the later construction of the middle platform.The goal of building a central platform is to improve the overall efficiency of the enterprise through reuse.

Prior to this, Alibaba naturally formed corresponding needs and exploration achievements in the process of enterprise development. It is generally recognized that the predecessor of Alibaba's middle platform was the "Shared Business Division" and "Data Platform Division" established in 2009. However, it was not until 2015 that the importance of the Taiwan strategy was emphasized by Alibaba insiders such as Jack Ma and Zhang Yong.

The reason is simple. In 2015, Alibaba has grown into a behemoth and continues to maintain astonishing market growth with the dividends of mobile devices. Some of the resource wasting diseases of large companies are gradually emerging at this moment.

So in this year, Alibaba proposed the Greater Middle Platform strategy, aiming to build a unified middle platform, achieve resource concentration and sharing, and improve organizational efficiency and innovation capabilities.

The mid platform strategy has indeed solved many problems in the development process, such as business decentralization, information silo, and redundant construction. Through the construction of the central platform, the data, technology, and resources of Alibaba's various business lines have been integrated and shared.

With Alibaba's aggressive expansion strategy, the commercial landscape encompasses multiple fields such as e-commerce, technology, and entertainment, and the effectiveness of the central platform continues to show:On the one hand, it improves the efficiency of resource utilization and reduces development and maintenance costs; On the other hand, it enables Alibaba to respond more quickly to market changes and launch new products,Improved Alibaba's flexibility and agility in the era of mobile internet.

According to media reports, "In 2020, Zhang Yong, Chairman of the Alibaba Board of Directors, stated in an internal sharing that fighting with a bayonet on the front line is already a thing of the past. The big data system based on the central platform is like an information hub, which can strategize and win thousands of miles

In the five years since the launch of the construction of the central platform, the costs of various businesses have decreased several times.

2020

There are reports that new retail businesses such as Hema Fresh are very different from traditional e-commerce in terms of discount methods and logic. If they are applied to the platform capabilities developed by Taobao and Tmall, many additional adaptations need to be made, which is too inefficient.

And Alibaba's vast business line also poses extremely high challenges to the development capabilities of the central platform. Edge businesses have a demand for the central platform, which may require waiting in line for two months before receiving a response. Waiting for feedback from the center is not as efficient as building a self built technical team.

epilogue

After the company grows, instead of encouraging everyone to collaborate through various means, it is better to truly use market methods to make two-way choices.

1+6+N

Reexamining the positioning and development direction of the central platform business is essentially a reassessment of the strategic environment of the entire Alibaba Group. Due to a reassessment of market demand, competitive situation, or internal organizational structure.

For Alibaba, splitting off the Zhongtai business now can better focus on the core e-commerce business represented by Taotian Group. For those diverse business departments, after the split of the central platform, they have gained greater freedom to explore the possibilities of new formats.

More importantly,Allowing each business group to have a complete technical and functional system is a necessary preparation for the future independent separation and listing of Alibaba's various businesses.

After the split of the central platform, Alibaba has ushered in transformation opportunities in terms of meeting demand and improving efficiency. A more dispersed Alibaba means a greater space for imagination.

Author | Wu Xin

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