Financial services organisations like to outsource. We buy the services of the best global IT, Marketing, Legal, Management and other consultants. By and large this is a successful operating model. A lot of other companies do it as well. Sure, costs are high and originality loses to utility but results are consistent and predictable. Just how we like it.
Then eBusiness comes along. We look at it, decide it’s either Marketing or IT, appoint a manager to look after it and send him to talk to the appropriate supplier about it. Job done. We just sleepwalked into a big mistake.
But it works for Advertising
Advertising is a long established practice. Barriers to entry are both high and steep. The skills and resources required to shoot a TV advert are beyond most organisations, the media market has been built around standardised formats driven by the economies of volume buying, and consumers’ expectations have been shaped by a generation of the current model. The model -an advertiser, an intermediary and a publisher- reflects the manufacturing and distribution model for most consumer goods, including the traditional intermediated model of financial services’ distribution through agents, brokers and IFAs. It fits like a glove.
eBusiness is disruptive for your organisation
eBusiness has always been recognised as a disruptive force. Organisations adopt eBusiness models to claim all parts of the distribution value chain, from manufacture to sales and service. Out go the inefficiencies and costs of intermediated models, in come the personalised experience and a much more intimate relationship with our customers.
We expect our customers to instantly recognise the advantages of this new model and flock to our brilliant new site, yet we often fail to see the new model presents us with an even greater change: in the same way we expect customers to drop intermediation, the model requires that we do so as well and become experts at all things eBusiness.
You can’t buy your way to success
In the old world, buying expertise in the form of campaigns or systems worked because the marketplace had been developed and defined by the service providers. Nobody does advertising like the agencies. Yet the eBusiness space has been defined by the businesses themselves.
It is Amazon, Google and easyJet who set the standard and with it our customers’ expectations. And they are doing it themselves, applying technology, design, usability, accessibility and commercial ingenuity to change the way products and services are manufactured, marketed and purchased. None of the leading eBusinesses of the world outsource their core capability -that of being able to provide user experiences that appeal and engage, and that work hard at delivering their commercial targets.
That is what’s really changed. eBusiness is not a means to an end, it is what you do now. Your product becomes a component of a larger proposition. Important as it ever was, but not singularly so: as you take control of the value chain your organisation must deploy new skills to ensure value is added to the customer experience, not detracted from it.
Your business is now eBusiness, and you must grow your capability to ensure your organisation achieves a level of mastery at eBusiness equal to that it has always had at creating what has traditionally been your product. There is certainly a role for digital agencies, but that role is a very different one, one that moves them closer to your organisation. The ideal Digital agency behaves like an extension of your in-house team, providing value in equal amounts at the top end -helping you create ambitious strategy- and the bottom -providing specialist resource in niche areas like design or keyword analysis. By and large the rest is up to your team. A team that’s larger than you’d expect. A team that crosses traditional corporate structure -development, design, analysis, marketing and other specialities oddly shared by its members in ways that make organisation charts a very abstract picture indeed.
A team of in-house experts that works a little like a virus, changing your organisation from within, injecting the eBusiness chromosome into your organisation’s DNA.
Do you think eBusiness will change organisational models permanently? Have you seen successful eBusinesses who use traditional outsourcing models? Will a new generation of agencies conquer the eBusiness space? let me know in the comments!