After eight years of exclusive operation, Alibaba Central was completely dismantled

Tech 2023-05-15 20:57:38 Source: Network

After the split of the central platform, Alibaba's major adjustment came to an end.Wen | Zhu YingliEditor | Gao HonghaoLatePost exclusively learned that Alibaba Group has recently conducted a round of adjustments and diversions in the group's technology, finance, human resources, marketing and other mid level businesses

After the split of the central platform, Alibaba's major adjustment came to an end.

Wen | Zhu Yingli
Editor | Gao Honghao

LatePost exclusively learned that Alibaba Group has recently conducted a round of adjustments and diversions in the group's technology, finance, human resources, marketing and other mid level businesses.

Alibaba Zhongtai is divided into technical Zhongtai and organizational Zhongtai. The technical center is mainly used to improve development efficiency and reduce development costs; In the middle of the organization, various functional businesses are transferred to the group.

In this adjustment, the CTO line, which plays the role of "technical center," is divided into two parts:

Data Center has independently become a subsidiary of iOrange Technology, with former CTO of Alibaba, Wu Zeming (flower name: Fan Yu), serving as the CEO. The new company needs to develop its own business and market, and be responsible for its own profits and losses;
The various teams in the "business center" have been merged into Taotian Group (i.e. Taobao Tmall Commercial Group), and merged with the technical line teams of the original Taobao based on specific businesses such as marketing and trading.

According to LatePost, there has been little change in Wu Zeming's jurisdiction after the adjustment. Yu Gang (Flower Name: Ruohai), the technical line leader of Taotian Group, still reports to Wu Zeming. Wu also manages the local living business technology line.

The adjustment of Alibaba Group's "organizational center" (functional line) includes:

Most of the customer service and experience department employees managed by CCO (Chief Customer Officer) Zheng Junfang (Flower Name: Shitai) are merged into the customer service center of Taotian Group, under the responsibility of Wang Mingqiang, the former head of the platform and strategy and operations center and vice president. Multiple middle and senior managers (at the director level) have resigned, and some employees have been laid off.
After the adjustment, CPO (Chief Talent Officer) Jiang Fang is only responsible for the compensation center, organizational culture department, and human resources business in a few departments such as Hema and Cainiao. A large part of the original CPO line team has been merged into the Human Resources Center of Taotian Group.
CFO (Chief Financial Officer) Xu Hong is still in office and continues to be responsible for group finance, but the finance of the separated business groups is no longer reported to him. Each business group appoints its own CFO and reports directly to the business CEO. For example, Li Bo, the person in charge of Taocai Cai, took over as the CFO of Taotian Group and reported to the CEO of Taotian Group, Dai Shan.
Dong Benhong, CMO (chief marketing officer), continues to serve as CMO of Alibaba Group. But most of the marketing department of Alibaba Group is transferred to Alibaba Cloud Group; The media department responsible for advertising has been reduced from hundreds to over ten people. The original marketing department was renamed as the strategic development department, retaining only the Olympic team and strategic customer team.
Zheng Junfang (alias: Abbess), the CRO (chief risk officer), led some employees to join Alibaba Cloud. Some of the remaining teams will remain at Taotian Group, while others will form a security company to operate independently.

Alibaba first proposed the concept of a central platform in 2015, which provided basic technology and universal capabilities support for various businesses. But as the group's business becomes increasingly diverse, this system can no longer solve all problems. A typical new retail business such as Hema Fresh, due to its different discount methods and logic from e-commerce platforms such as Taobao and Tmall, requires a lot of adaptation modifications after calling on the middle platform capabilities, which will reduce its transaction efficiency.

The growth of Pinduoduo, Tiktok e-commerce and Meituan also reminds Ali that Taobao Tmall needs more independent decision-making power, and other businesses need to be more agile in responding to market changes.

In recent years, Alibaba has begun to try to thin out the central platform, including changing the functional positioning of the business central platform and splitting the organizational central platform. In 2023, after the overall division of Alibaba Group into "1+6+N", each business group had its own CEO and independent board of directors. The delegation of technology and functional center of the group will make their organizational structure more complete, and Alibaba's "big center" system has finally become history.

After going public, the technology "big and medium-sized platform" once improved Alibaba's profitability

Alibaba's strategy of "large, medium, and small front platforms" has its historical background. In 2015, Taobao Tmall has become China's largest e-commerce platform with over 400 million users and nearly 3 trillion yuan in GMV. At the same time, their business systems have also become complex to a certain extent, with billions of products, millions of merchants, and thousands of categories. They need to cross dozens of business systems such as publishing, trading, marketing, store, payment, and after-sales to sell a product, which has led to slower and slower response to business needs.

In 2009, Alibaba established the "Shared Business Division", mainly responsible for developing common functions that are commonly used in most businesses. At that time, a "hundred group battle" broke out between online group buying platforms. The business unit utilized its accumulated skills in user, transaction, product, and evaluation, and only hired a dozen or so employees to launch the group buying platform "Juhuasuan" for Alibaba in a month and a half.

Zhong Hua, a former middleware architect at Alibaba, once recalled in his book "Transforming Enterprise IT Architecture" that in 2015, Jack Ma led group executives to visit Supercell, a gaming company based in Helsinki. This company, with an annual profit of $1.5 billion, has a team size of no more than 200 people. With the help of the platform built after sedimentation of game development materials and algorithms, Supercell has almost no management role involvement in the game development process, and iteration is also very fast. This has greatly shocked Alibaba executives.

At the end of 2015, Alibaba Group officially launched the "2018 Mid Platform Strategy" and established a mid platform business group to support front-end businesses such as Taobao, Tmall, Cainiao, and Alibaba Cloud. CTO Zhang Jianfeng served as the president of the business group.

In the following three years, the Zhongtai Business Group successively established a "data center" and a "business center", where the data center stores, calculates, and products various business data, ultimately forming data capabilities for front-end business to quickly call, such as algorithm model capabilities for pricing, inventory, and data security capabilities for permission management, risk management, and so on; The business center refines and integrates the core capabilities of various businesses, and finally abstracts a group of common capabilities that can be shared, such as the user, transaction, commodity, marketing, logistics and other business modules it establishes.

With the support of the central platform, the wholesale website 1688 launched in 1998 finally gained marketing technical capabilities in 2017. The situation with AliExpress is also very similar. Wang Mingqiang (flower name: Sihan), who came from Taobao in 2018, attempted to leverage the capabilities of Zhongtai to transform this overseas product with a simple technical architecture.

In 2020, Zhang Yong, Chairman and CEO of Alibaba's Board of Directors, stated in an internal sharing that the "bayonet fight" on the front line is already a thing of the past. The big data system based on the middle platform is like an information hub, which can "strategize and win thousands of miles". He also mentioned that in the five years since the launch of the construction of Zhongtai, the costs of various businesses have decreased several times.

In the last quarter of 2020, Alibaba's operating profit exceeded $7.5 billion, five times that of the same period in 2014. This is also a few years when Alibaba's operations have been relatively stable, with dangerous competitors emerging, but not yet threatening the profitability of the group.

In 2018, there was a discussion on weakening the technology platform

The technology center has improved the efficiency of the group's technology resource utilization in the early stages, avoiding the duplication of wheels in various businesses; But as it faces more and more demands, its efficiency has gradually become low, and its relatively single capabilities have become difficult to match Alibaba's increasingly diversified business.

Taking the business platform "Jushita" as an example, its original intention was to provide universal capabilities for e-commerce platforms such as Taobao and Tmall. However, the invocation of new retail businesses such as Tmall Supermarket and Hema Fresh will be very complex. In terms of transactions, Hema Fresh involves offline credit card payments, and this technical capability cannot be supported by the central platform. The same problem occurs with Lazada, Xianyu, Cainiao, and Alibaba Cloud.

In September 2018, then CTO Cheng Li (flower name: Lu Su) organized a meeting of the group's technical committee and more than 30 CTOs from various businesses to discuss efficiency issues in the middle stage. An Alibaba business line CTO who participated in the meeting told LatePost that one of the issues at the time was "Taiwan to China", and there were both opposing and supporting opinions. After a day of debate, everyone reached a consensus: the central platform needs to become thinner.

The above CTO explained that the business center would have intervened in the business process and directly developed software for the business team's work. After the adjustment, the business center only provides lower level technical capabilities, allowing each business department's own technical team to develop specific software on this basis. After this adjustment, the team in the business center has been reduced by nearly half, while the data center still retains a size of 600 to 700 people.

Since 2020, more and more innovative businesses have started to abandon the central platform and form their own technical teams. For example, Taobao, known as the "special zone" business, if a demand is made to the central platform, it must also wait in line for at least one to two months to receive a response; And when it establishes its own product and technical team, all requirements can be immediately addressed.

At the end of 2021, Alibaba proposed a management concept of "diversified governance" to replace the "large, middle, and small front" in the separation of the "organizational center" with functional business as the core. Among them, Alibaba's HR and PR departments for various businesses have shifted from reporting to the relevant leaders of the group, to reporting to the respective business presidents. The human resources department has also introduced a salary turnkey system, and the unified recruitment function of the group has been delegated to each business. Each business president considers how to allocate the budget, how many people to recruit, and what recruitment standards are.

After this round of spin off, all Alibaba business groups will strive for independent operation. When Alibaba is no longer a big group that promotes and retreats together, it no longer needs a central platform.

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