blog
e-Business is still too much "e-", not enough "business"
By Eric Daugherty
While the Web came of age in the mid-to-late 90's, formal e-business teams have grown up in the 21st century. Use of the Web by financial services firms has gone from a curiosity to an experiment to a customer expectation. Yet, after an average of nine years of tenure, the majority of e-Business teams at asset management firms still have huge opportunities available to drive the bottom line. Only 39% of these teams develop business plans, and 35% measure whether they meet revenue or cost targets. When asked to categorize planned initiatives for 2010, firms indicated that only 31% contain a direct link to the firm's bottom line.
Our newest report, Optimizing the Role of e-Business, reviews how teams are evolving and presents a maturity model as a framework for driving continuous improvement.
We found that 64% of firms currently operate in the "Defined" stage, with the remaining 36% in the early "Managed" stage.
e-business is more vital than ever in a marketplace where firms compete fiercely to optimize distribution of their products. Too many teams operate in a comfort zone of site redesign and process management when they need to be focused on demonstrating impact to the bottom line. With 80% of advisors using asset managers' public sites and 90% accessing advisor sites (according to kasina's upcoming What Advisors Do Online 2010 report), the economics of improving e-Business team performance and output is compelling.
In particular, we recommend that e-business teams:
- Tie prioritization of initiatives to business results
- Leverage social media to broaden customer acquisition efforts and deliver content where customers are
- Outsource or distribute non-core functions
- Value and hire for e-business expertise from other industries, and
- Use zero-based budgeting and metrics to improve prioritization of initiatives
In summary, e-Business teams have made enormous contributions and headway in their firms. They are now vital and connected to nearly every significant initiative that firms undertake. Getting to the next level of e-Business and becoming a differentiator will take more than keeping core functionality running and operating a good web site. Great e-Business teams that get to the Managed and Optimized levels will be able to prove their integration with all aspects of their firm's business and justify their efforts by pointing to the profitability impact.