‘Never let a good crisis go to waste’ – The 2020 Business Information Review Survey: Part III

Introduction

Welcome to Part III of the 2020 Business Information Review survey. As previously noted, this is the world’s longest running conversation about business information services and their management, which is celebrating its 30th anniversary. In the third instalment of the 2020 survey I capture our participants’ reflections on a range of topics that are shaping their operations including supplier relations, client engagement and a summary of their 2021 priorities.

Supplier relations: ‘We are all in it together’

Many gave suppliers credit for their response to the crisis, adopting a ‘we are all in it together’ approach. Most suppliers created free COVID hubs to inform their clients’ responses to a rapidly changing situation. Where contracts fell due during the period, suppliers deferred price increases or put them on hold in recognition of the uncertain economic climate. Encouragingly, recent 2020 results announcements have seen most suppliers report healthy year on year increases in both revenues and earnings.

It is possible to divide our respondents into two distinct camps in this section, with a pronounced difference between those IS team who have ownership of supplier relationships and those that have passed it to colleagues in procurement roles. For those participants that continued to work closely with suppliers, they had mostly positive reflections on the experience throughout the crisis:

‘The most successful suppliers have been those that focused on customer success, partnering with clients to understand their needs and offering higher levels of transparency’.

‘We are pleasantly surprised with the data providers as we have been getting flat renewal rates’.

‘They seem to understand the world has changed and they can’t wade in with 10% uptick renewals’.

‘Overall vendor relationships are good and they have supported the automation initiatives, trusted relationship with the vendors to develop these capabilities’.

‘Vendors have been very flexible and accommodating. We went to vendors proactively to let them know there was no money in the budget, so haven’t seen price hikes from the suppliers’.

‘A vendor wanted a 2% uplift, I asked vendor for an explanation and details. Then the vendor removed the increase’.

As an industry, we have always recognised the symbiotic nature of the relationship between the IS department and the information suppliers. It is reassuring to see that so many participants acknowledged the support they received throughout what has been a very challenging year, several more commented on the strength of the engagement with their suppliers:

‘Good relations with large, strategic vendors – who have a lot of empathy for the current situation’.

‘It’s all about relationship building, making sure they understand our business and what we do with their data, and making sure we are doing the right thing. The primary focus is understanding use cases, governance and adherence to contractual terms’.

‘Some positive experiences with suppliers, but it tends to be relationship based’.

‘Good relationships with a small number of suppliers’.

‘Big advocate for the vendors to push their capabilities and content to the wider organisation. They add to our value proposition’.

‘Overall relations are good. We hold them accountable and responsible’.

IS leaders are appreciative of the flexibility provided by their suppliers throughout the pandemic, but as they look forward to 2021, and organisations adapt to the new normal some expressed concerns about the licensing of content and the governance of contracts. Given a rapidly moving situation, most suppliers had ‘cut their clients some slack’ to enable them to continue to operate effectively, if not strictly within the terms of the licence. One respondent noted: ‘suppliers were very flexible to support and meet client needs initially but emerging concerns that they will be more challenging as they adapt to supporting a distributed workforce on an ongoing basis’.

Where IS have retained ownership they report an intensified drive to bring all spend under management: ‘We are responsible for all content spend globally, we already have ∼95% under management’. This is a consequence of increased financial focus and drive to realise better value for money from these relationships: ‘Source management has been extremely busy, the central budget for information reduced for 2020 due to some savings. More budget is likely in 2021, but the scope of work for the group will be extended to all products’. The increased rigour around the content acquisition process is extending the sales lifecycle for the suppliers: ‘Product providers are reporting a very strong sales pipeline, but approval levels are more rigorous than before which is slowing down decision making. Suppliers are helping clients scale and respond to the environment, but not moving as quickly as they would like due to extended approval processes’. There is some evidence that respondents are turning to procurement to improve their processes and negotiating leverage: ‘I have increasingly been bringing partners from Procurement to help with negotiations’.

These groups expressed their concern about underlying systemic changes to the supplier landscape, which have been happening for some time. Chief among them was vendor consolidations resulting in a lack of choice. Our conversations suggested that 2020 was something of a hiatus while everyone dealt with the crisis, but many are worried that these shifts will resume in 2021. These will have increased in light of the approval of the acquisition of Refinitiv by the London Stock Exchange and the announcement of the S&P takeover of IHSMarkit. Neither of which had been announced at the time of our conversations. Increasing scale brings operational and relationship challenges as well as commercial worries. As suppliers get larger, their products and services can become increasingly homogenised, adopting ‘one size fits all’ to enable them to scale their business. This is something of a paradox when client organisations are looking for increasingly specific, contextual and targeted information to support their decision making.

‘We need targeted content sets, making sure they are fit for purpose, taking a more tailored approach’.

‘Consolidation of vendors is increasingly a problem. Business information vendors tend not to understand our industry and are not prepared to adapt to meet the needs of the client’.

‘Vendors are not close enough to our business and they do not know our use case requirements. What they seem to think is useful would apply to about 3 people in a firm of 5,000’.

‘Scale is a big question, we do not use information at scale which meant that embracing new technologies is cost prohibitive. We need to think about maximising our understanding of what we are using. So, rather than taking everything we can have more control’.

This disconnect crops up repeatedly and points to a significant challenge for suppliers, IS teams and their internal clients. All participants recognise and acknowledge their dependency on information suppliers, which suggests there is significant room for improvement for everyone involved in these relationships. It is apparent that there is a significant opportunity for IS teams, but they need to invest in their capacity and capabilities to build their platform advising their organisations to drive enhanced value from available sources of information. This manifested itself as several participants expressed frustration with their suppliers:

‘More traditional vendors are not able to meet our needs, they tend to be very slow as they adapt to the market’.

‘No one really understands our needs or seeks to learn them. They struggle to commit time to build client relationships. Vendors come in saying they built an application for another client and thought it might be useful for us as well – which it usually isn’t’.

‘Vendors need to invest more to understand the requirements as they continue to engage this sector. Our sector is very different to the commercial sectors: different business model and use cases’.

‘Client support is critical to success – no signs of innovation, no support model or user engagement’.

Private Equity investments were called out as a challenge by several participants, so IS leaders are turning to smaller, more agile suppliers that can adapt to meet specific use case requirements and have the appetite to tailor their product roadmaps closely to their clients’ needs. Two respondents specifically reported they were already trying to get ahead of the curve by engaging smaller, privately owned vendors to support their needs. Combining a more intimate understanding of the use cases of the business to identify and engage smaller suppliers that can meet their specific requirements. As well as turning the vendor engagement process on its head, by proactively reaching out to the market with a clear set of requirements and expectations for their suppliers. Some of our respondents recognise the need and appetite of newer suppliers to understand their target market are well disposed to taking advantage of these capabilities. A number of IS leaders have been more proactive in determining their strategy to move away from larger suppliers and actively seek to work with smaller, emerging and disruptive players:

‘We are trying to move away from private equity owned suppliers – given history of price increases and drive to scale those businesses to drive revenue. We now have a clear view of what is required and why, we are shifting away from supplier pitching to us to asking them to work with us to a defined scope that meets our needs. Engaging smaller data providers who are much more flexible when we go to them and say “this is what we want” and they are prepared to adapt and fit into what we need’.

‘We have also see emerging content providers that are typically quite young and don’t always understand the client business and how their products fit in’.

‘Lots of suppliers are claiming they have solutions and want to understand the needs of the business’.

‘We are moving away from some the traditional vendors. Working more with start-ups and disruptive vendors as they are better able to meet needs’.

‘Clients want more genuine expertise and looking to their vendors for more sophisticated support and partnerships’.

‘Vendors moving away from off the shelf product, but customised products that can be tailored to their use case’.

‘Automation projects rely on close cooperation with data vendors to deliver them successfully. Looking to a long term partnership with key vendors to continue to develop these technologies. Also quite clear you cannot rely on one vendor, as there is no single provider of comprehensive data from all relevant markets, our platforms are being built to accept data from a wide range of vendors’.

There appears to be no shortage of emerging players in those areas where there is rapid growth potential, including Risk, Compliance and Environmental, Social and Government (ESG) information. Unfortunately, this makes these suppliers prime targets for acquisition by larger vendors or private equity firms who continue to be attracted to the sector seeking to capitalise on the potential returns. For example, in October 2018 Blackstone acquired the Thomson Reuters Finance and Risk business for £17 bn, subsequently rebranding it Refinitiv. In August 2019, LSEG announced it had agreed definitive terms to acquire Refinitiv from Blackstone for £27 bn!

One respondent commented on their drive to review and drive value by taking a portfolio management approach to their supplier inventory. This is not a new concept, but the combination of all the forces above suggests this holistic, inclusive approach may have benefits. Initially their focus is to reduce cost, but they are increasingly focused on value. They strive to understand specific use case scenarios to determine the value of products and how they may contribute to revenues and profitability. Further evidence that the future opportunity for IS teams is to use their specialist knowledge to bridge the gap between suppliers and their internal users: ‘In the US we are working with a consultant to examine the vendor portfolio. They provided a good external benchmark. We believe the costs are too high, whilst the vendors claim they are not! We are conscious of some of the issues of using a consultant and our relations with vendors, the main aim is to lower cost – primarily by benchmarking costs with competitors’.

Client engagement: ‘The crisis has humanised people’

All participants in this survey reported that client engagement had improved significantly after the onset of the pandemic, especially with their senior stakeholders. Initial fears about remote working making client engagement more difficult were quickly dispelled. This represents a small sample of the reflections of my respondents:

‘After the initial disruption and challenges, client engagement has been easier and we managed to have conversations that may not have otherwise have taken place. BIS has raised its profile and been introduced to other groups who are looking for support’.

‘IS groups are reporting much stronger client engagement. Clients have had more time to speak with there is teams either over phone and video and relied less on email and messaging’.

‘Client engagement has improved significantly during lockdown, characterised by more dialogue with and buy in from senior leaders’.

‘More engagement with the partners, previously it was associates and trainees, but partners have been more accessible and relying on the service – tends to be the more established partners, not the newer partners. The partners have not had more junior staff to do legwork for them, so the more established partners know the Library and will call up to ask questions’.

‘Using Zoom, Teams and Slack means everything is much more connected and has levelled the playing field’.

‘So a great leveller, everyone has come together and faced a common challenge so there has been a much greater openness to work together collaboratively’.

‘Crisis has been a leveller – people have stuff to talk about and common ground’.

‘Consistent feedback that access to clients has increased throughout the year. Remote working has democratised the workforce’.

‘Remote working has led to more respect for the team, there are fewer questions and well thought out. Tend to try to self-serve wherever they can before engaging us’.

‘Very easy when they are in the office to build affinity with their colleagues and to treat support teams as “lackeys.” Whereas, when you are remote from everyone you have to build your relationships the same way. This builds respect and helps with the engagement going forward’.

‘Relationships and engagement has been good, the biggest impact has been that everyone seems to be busier than ever and somewhat overwhelmed’.

‘We have evolved from just being a cost/overhead (just a library). Clients have a lot more understanding of the function and its benefits and how we add value. We owe this development to evolution of the capabilities of the team and the emergence of more disinformation and misinformation, which has led clients to seek out more voracious information from us’.

‘We are seen as trusted advisors and a collaborative group with a really rich engagement’.

This is a significant shift from earlier surveys, where respondents repeatedly expressed frustration that they struggled to engage senior stakeholders, sensing that their organisations did not understand the value proposition of their teams. Clearly, the reduced proximity and propinquity of teams and individuals has democratised the workforce and elevated the IS team in the eyes and estimations of their peers and colleagues. Reminding me of an old American Library Association poster that carried the strapline ‘The profession on which all other professions and occupations depend’.

Several leaders reflected on the need to maintain these relationships, through the crisis and beyond. Many have taken very deliberate steps to keep these energy levels, with regular briefings and ongoing commitments to their stakeholders. Although some recognise that fatigue is setting in and that maintaining these engagements over the long term may not be sustainable.

‘Our current focus: who are the most important groups where we keep the relationship alive and well? How do we reach out to them, how do we connect with them to understand their priorities? Make sure that keep cultivating those key relationships’.

‘Client engagement improved during the pandemic, we are meeting with senior MDs every 2 weeks and they never miss the meetings. They want transparency and extensive Management Information to support decision making’.

‘Trying to keep the dialogue going with clients, especially when it comes to product spend and value’

‘Client engagement has improved since I started. I spent time building relationships with senior people and have bi-weekly sessions with each BU to discuss concerns, issues and challenges. Very successful and has led to a much richer dialogue’.

‘Relationships are much stronger as a result of having virtual meetings. If you want to speak to someone, you have to schedule a call and plan an interaction’.

‘Some evidence that fatigue is setting in and this is not sustainable in the longer term’.

So, there is plenty of evidence that relations with senior stakeholders were enhanced through the crisis. This has had a number of benefits for IS teams and provided opportunities to enhance their work, elevate their profile and develop the next generation of IS leaders.

‘Richer client engagement as clients recognise the team and its contribution – invited to meetings and joining the project teams’.

‘We are being brought into projects much sooner as clients need information quicker and recognise this requirement’

‘Has been really good for the status of the team’

‘Overall levels of collaboration with practices has been improving, especially in strategic initiatives and projects. This tends to works best when there is dedicated support for specific clients and their projects. Turns into an ongoing engagement that is very agile and adapts to the changing needs. This has led to more conversations with other lawyers and partners who want to leverage the capabilities’.

‘They have also been very supportive of initiatives – their engagement speeds up decision making’.

‘Extend engagement to other BIS managers to give them senior level exposure’.

‘This has given us traction with more junior staff who now work more closely with us to develop new products and capabilities’.

All this is extremely positive, but something of a contrast with our leaders’ perception of their engagement with more junior staff. This has been more of a challenge that is difficult to pin down. Most notable were those organisations that welcomed cohorts of new trainees and analysts during the crisis. These proved particularly difficult to engage without the opportunity to meet in person to build social capital. Others found that operational staff were so busy that any dialogue had become rather transactional.

‘Trainee training was a nightmare – trying to get engagement was extremely difficult and concerned about their research skills’.

‘Missing out on the hidden questions and the serendipitous opportunities to coach/advise. Trainees could come to the library and ask even basic questions without embarrassment. Difficult to build trust based relationships’.

‘We had two intakes of trainees – in March and September – all done remotely, the March intake was difficult but a useful experience to get better traction later in the year with the 2nd intake’.

‘The firm has made a lot of new hires in new areas of focus for the business, but it has been quite hard to engage the new staff. Difficult to build social capital with the new staff by doing a drive by on them’.

‘International offices are also growing, able to visit initially but struggled since given these offices have been growing’.

‘Junior staff have also struggled to get up to speed (corporate socialisation) and don’t get the context or culture. No serendipitous discovery or team brainstorming. Some of the work has become more transactional, which is not aligned with the advisory/consulting capability we are aiming to build’.

‘The work is not more transactional but communications are more transactional – there is a need to get stuff done and less time to talk about it or explain the requirement’.

Ultimately, successful client engagement comes down to personalities, those that found it difficult to build meaningful relationships when in the office struggled even more during the crisis; while those that found it easy to get on in the office adapted more successfully to remote working. Ultimately, client relationship building and management never stops, IS teams and their leaders will continue to invest in the discipline both through and beyond the crisis. As one respondent poignantly reflected.

‘Our clients have been very accessible through the pandemic and supportive. When it comes to our senior leadership we as an organisation rely on information, knowledge and expertise; it’s what we sell. But just because they rely on it doesn’t mean they absolutely recognise it’.

2021: ‘I think the future’s bright’

This contributor’s quote seemed to summarise the overall mood of my conversations with IS leaders. In closing the interviews with my correspondents, I asked them to identify three priorities for the year ahead. Rather than include extensive quotes, which would be inappropriate, I will draw out the main themes from their responses to provide a flavour of their 2021 deliverables. It is worth reflecting that 2020 was a unique year that saw a hiatus on most of the strategic deliverables that our respondents had planned. As one person said: ‘Everyone is still in crisis management mode, the focus is on responding to the operational changes and maintaining service levels. Those that have had capacity have spent time sorting out some outstanding items that needed attention’. All the IS teams in the survey were stretched by the demands of their organisations and judging from the earlier comments, they successfully provided a robust response and have good reason to be optimistic about the future.

Looking towards 2021, respondents were cautious not to overcommit themselves and their teams to too many deliverables. One stated that they are not looking beyond the first quarter and another is using 2021 to complete existing deliverables and will only develop new deliverables for 2022. One commented ‘We have learned that putting too much on your plate is not a good idea’.

With this in mind, one of the biggest themes was the welfare of the IS teams. Many IS leaders are worried about the toll the crisis has taken on their staff. The wellbeing, morale, motivation and job satisfaction of their people and the lack of in person contact over the last 12 months are major concerns. Staff retention is a major focus, many are planning to invest in training programmes to enhance their skills, with a view to repositioning them further up the value chain. Those with offshore resources are recalibrating these teams to provide more effective support to their onshore colleagues. While others are planning to augment their teams to improve both the capacity and capabilities of their operations.

Continuing the human theme, many respondents were anxious to maintain their senior client engagement into 2021. The crisis has demonstrated both the value and power of having strong relationships with senior leaders, as outlined above. So communication and relationship building are major ongoing priorities. For some, this will involve ensuring their IS vision and strategies are aligned with organisational priorities and values, while others are planning to work on communicating and marketing their teams’ capabilities.

The ongoing economic uncertainty in the wake of the crisis is reinforcing the importance of cost management. While no one felt their headcount was under scrutiny, the same could not be said for their product spend. Organisations are taking a value based approach, as opposed to indiscriminate cost cutting: ‘Our strategy is being driven by value’. This places greater emphasis on the IS teams to understand the business in the context of information use cases and how information drives value. Several are renovating their management systems to improve metrics reporting and reulting transparency and accountability. Those teams that manage their organisation’s portfolio are also exploring how automation can help alleviate the burden of some of the routine aspects of this work, enabling them to focus on more valuable work analysing metrics and supporting decision making across these products and services.

Data is the fourth pillar on which IS teams are looking to build, despite the challenges associated with deriving value from data and the tendency of most organisations to prioritise internal data sources. IS leaders are gearing up ready to support these initiatives, both in a governance role and to introduce externally sourced data to the systems. The market is primed to enable organisations to enhance the value derived from external data, but most organisations are not yet ready to leverage these assets. As one respondent put it ‘there is no jumping off the digital transformation roller coaster now. Thanks to the pandemic it has gotten to this point and we now need to ensure the continuity of these platforms going into 2021’.

The final theme is based on technology and automation, with a key focus on empowering end users. The crisis put a great deal of pressure on IS teams to support the transactional needs of the business, this distracted teams from their strategic engagements and deliverables. Improved digital literacy and senior management recognition and appreciation of the role and potential of IS teams provides an opportunity and appetite to explore these technologies. Enabling colleagues to ‘work smarter, not harder’ cropped up a number of times. IS leaders are also aware that the success of these tools will hinge on effective user education. So, it seems likely that many organisations will accelerate these initiatives to realise gains in both efficiency and effectiveness.

Conclusion: ‘We forget that we are more service than we like to think we are, how we present ourselves professionally matters’

Another quote, from one of my contributors, that seemed to capture the last 12 months as well as offer a pointer for the future. During the course of the COVID-19 crisis, IS teams (and their stakeholders, clients and colleagues) came to realise they are ‘more service than we like to think’. The crisis accidently demonstrated their value proposition at a transactional level but undermined their strategic aspirations. I truly believe IS leaders will not let this crisis go to waste, having been ‘thrust into the limelight’ they had an opportunity to shine and performed admirably through the crisis (that’s not to say that others haven’t). The crisis has provided the platform and profile to go on to realise their full potential. I look forward to catching up with them in 12 months to hear how things developed.