The financial services industry is known for its complexity in terms of vendors, products, user requirements, agreements and pricing structures. The diversity in terms of alternative vendors and products is enormous and the level of demand from the business due to continuously changing business requirements and vendor offerings put continuous pressure on the market data (and IT) organisation. The industry itself however knows a high level of secrecy due to the lack of transparency and limited exchange of information between participants.
Worldwide internal professionals are under growing pressure of market data users as their requests to the internal organisation are ad hoc, need to be addressed immediately, seem simple but are often very complex (financially, content, technical) and often relate to vendors and products that are not used (yet) in the organisation. Business request not only generate more revenue but often also result in extra costs and they have an impact on many internal departments (such as IT, procurement, support, etc).
In the current market conditions there is a growing pressure to lower these costs. Most of you are already familiar and confident with the administrative and demand management challenges when it comes to managing market data and its user community. But how do we efficiently select and manage all vendors and solutions out there in the market place? I am sure we all want to work with the best providers and systems available with the best possible agreements and other terms & conditions in place.
Based upon the current (development of) the vendor landscape you should have a market data services roadmap or vendor strategy document available addressing and explaining:
- Market trends, including vendor and product developments
- Evaluation of vendor and product offerings
- Services and tools required to do the job within your organisation
- Department and user profiles (profiling)
If you don’t know what is available in the market, what is going on and what functionality you exactly need to do your job you will never be able to optimise your vendor management.
With the help of a vendor strategy document and your current vendor contracts you need to regularly evaluate vendor proposals and agreements in terms of renewals and/or cancellations. INFOmatch’s contract management features and the expiry reports make sure you always have the correct and required information available. You shouldn’t be afraid to discuss and negotiate with the individual vendor at the other side of the table. Often, these vendors cannot permit to lose business, and they know you might consider alternatives against better pricing and terms & conditions.
Another discipline of vendor management is benchmarking. With an internal benchmark you compare costs and services in your own organisation between countries, regions, departments, users within departments, etc. This will give you more insight in your most expensive branches, departments, users, vendors, etc. INFOmatch is able to deliver several kinds of comparison reports.
But to identify areas of over and under spending and potential cost saving opportunities you also need to know how you are performing compared to your peers. To manage your costs, you need to know your costs…and those of others! You need to gain insight in the position of your organisation, compared to your peer group in the industry in terms of cost, contractual agreements, services and your market data organisation. Peer group comparisons overviews and heat map analysis could do the trick here.
Over the years we already have assisted many firms in optimising their vendor management. Please feel free to contact us if you have any questions or require additional information!