What Does “LOB” Line-of-Business Mean | Line of Business Examples
What is LOB, Line-of-Business?
Line-of-business (LOB) refers to the major function of an enterprise that delivers a product or service to customers. LOBs are the primary drivers of the business’s revenue and profit, and they serve as a framework for structuring companies.
Line-of-business is a term used in the business world to describe one of the main aspects of an organization’s operations. It refers to a specific product or service, such as banking, retail, or healthcare.
A line-of-business can be either broad (such as “retail”) or narrow (such as “bank teller”)
As firms grow larger, they often break down into business units, which are groups of departments and functions. Each business unit competes for sales and profitability with others within the company. As a result, each business unit needs to have specific strategies that maximize its performance — but these strategies also have to fit into the overall company’s strategy.
The term line-of-business refers to a specific group of products that a company sells — or the department or function within a corporation that manages those products. LOBs are the primary strategic units within a business, and they’re responsible for generating most of the company’s revenue.
For example, a company that sells dual-mode cell phones might have the LOB of Wireless (cell phones) and the LOB of R&D (research and development). Each unit creates its own sales strategies but also relies on other parts of the company for its needs. For example, Wireless might rely on R&D for new technologies to use in future products.
Line-of-business management is the term used to describe the planning and management of a line-of-business. Line-of-business managers focus on maximizing revenue and profit for their LOBs. In general, their three main responsibilities include:
Government agencies are increasingly adopting line-of-business (LOB) solutions because they can be effective in optimizing operating efficiency, improving customer service, automating manual processes, promoting transparency, and reducing fraud.
LOB solutions can help to improve the transparency of business processes, reduce cost and ensure the quality of services being delivered.
The scope of a LOB solution needed by an organization depends on its business operations, including the number of people involved and their roles in delivering products or services to customers.
The size and complexity of an organization also determine whether a LOB solution is necessary or if different processes within the organization should be integrated into one system.
LOB solutions help an organization improve the quality of research and development and reduce costs associated with new product and service offerings. Integrated LOB solutions are also crucial to the efficient operation of IT systems.
To determine how to approach a particular LOB solution, the determination of its functional objectives is necessary. Objectives are commonly defined based on how they relate to specific business processes or deliverables, e.g., sales, marketing, operations, and finance.
The LOB solution should be designed around the unique values of the organization.
It is important to understand how people will use LOB solutions so that an appropriate level of functionality can be included in a plan.
Articulating the usage requirements for LOB solutions allows a company to take an objective view and assess where future business value will be created.
LOB solutions need to be designed with access and usability in mind. It is important to consider how end users will use LOB solutions so that the appropriate level of security can be applied to them. The nature of the work performed by staff also determines how they use LOBs
Line of Business Examples
Line of business examples includes retail, manufacturing, and service industries.They may also have one for their research and development. they might have one that is more focused on human resources
- Retail is a type of line of business that sells products to the public for personal or household use
- Manufacturing is a type of line of business that transforms raw materials into finished goods by means such as cutting, shaping, assembling, packaging, and labeling.
- Service businesses provide services to consumers in fields like healthcare or education
Role of LOB Line of Business Manager
LOB Line of Business Manager is responsible for managing the business in a specific line of business. They are accountable for achieving revenue goals and profitability targets, while meeting customer needs. The role may also be known as a product manager, account manager, or territory manages
The LOB Line of Business Manager is also responsible for managing the day-to-day operations of a specific department within an organization.
This includes overseeing all aspects of the department, including budgeting, staffing and training needs, equipment purchases and upgrades, customer service initiatives, and more.
In addition to these responsibilities, the LOB Line of Business Manager must also ensure that their team has access to resources needed to succeed in their job
The LOB Manager will forecast sales for the upcoming period (year, quarter, etc.) for each line of business and decide how much of the company’s internal capital should be allocated to each based on both total cash flow (gross revenues) generated… and the relative profitability of each.
Line of Business in Insurance
Line of business is a term used in the insurance industry to describe an organization’s primary function. For example, a company that provides life insurance may be referred to as “a lifeline of business”.
It is used in the insurance industry to refer to an insurer’s product line, or group of products that are typically grouped together for marketing purposes.. LOBs are usually defined by their type and coverage area, as well as other factors such as the types of risk insured against or the methods used to calculate premiums.
The most common types of LOBs include:
- Personal Lines
- Commercial Lines
- Life Insurance and Annuities
- Health Insurance and Medical Services Plans (MSP)
- Workers’ Compensation
- Property/Casualty (P&C)
- Employee Benefits Programs (EBP).
The term can also refer to the type of coverage offered by an insurer or agent. Some insurers specialize in certain types of coverage, such as life insurance or property and casualty (P&C).
Other insurers offer a wide range of products, such as homeowners’ insurance and auto liability. An insurer may have more than one line of business.