Vanguard walks a line when it comes to dazzle on its Web site. In terms of functionality, Heller has high expectations, judging the company's efforts against any Web site that customers might use--"whoever brings them the best Web experience." The company has brought in Yahoo's head of strategy to talk with IT leaders and is bringing in an Amazon.com exec, all to get the team focused beyond their financial services rivals.
Vanguard's thinking: If Amazon, where you spend several hundred dollars a year, has incredibly useful features for you, and the site where you have your $500,000 401(k) has none of them, that hardly inspires confidence. And the other side is true as well: If there's an error or access problem with Amazon, you get bothered. If Vanguard's site goes down, customers might wonder what else the site is doing wrong. It's why security and reliability always come before function on the site.
The IT team is steadily moving features that work on CrewNet to client-facing roles. It has put rich-Internet applications on its site to make it easier to use--time-saving rollovers like those staff photos, but also more complex tools that allow drag-and-drop fund comparisons.
Institutional customers, big employers who hire Vanguard to provide 401(k) and other retirement benefits to their staffs, have benefited from these features. For example, Vanguard created a "total retirement summary" to let its employees look at all their retirement benefits at once on CrewNet. Satisfied that it could do that securely, the company has shared the tool with some clients, so their employees link from a company portal to the Vanguard site for the same type of data.
It's part of a major push to personalize and simplify the Web, where Heller says it has become too easy to push more data at customers and give them too much to sift through. "We're trying to emerge as the antidote to complexity," he says.
One example is that, in late spring, Vanguard started posting a few Web videos of investment pros talking about trends, such as the risk of chasing hot returns by a certain fund. Vanguard hopes to soon be able to serve up that video as an option, say, when a person is doing comparisons of several funds.
When it comes to personalizing the Web experience. Vanguard has the data to do so--it knows the age, assets, and often income of those who log on. The next step is to use that to tune content. For example, a huge swath of baby boomers are moving from accumulating retirement savings to figuring out how to spend the money wisely and make it last. Vanguard has an opportunity to offer them advice, in the form of video, interactive tools, and written content. "Why treat a 22-year-old the same as a 65-year-old when it comes to content?" Heller asks.
When it comes to overall IT strategy, Vanguard takes a different approach than many companies. It does almost no outsourcing--it has about 2,600 IT employees, plus about 300 contractors. Most work at the company's headquarters in suburban Philadelphia, with about 400 at the Charlotte, N.C., campus. The company builds about 70% of its applications and buys the rest--the opposite of most companies--and integrates them using a service-oriented architecture.
It's a place where business executives understand information technology, starting with CEO John Brennan. He holds business-unit executives accountable for the performance of IT initiatives for their teams; a poor understanding of IT isn't an option. The opposite is true for IT: the staff is expected to understand the investment business.
It's just the kind of place where you might expect that some of the drivers of Web 2.0--collaboration, interactivity, Web-centric integration--would get the business-friendly, ROI-driven treatment.