The majority of firms pay significant portions of their budgets to the providers of information services that they consume, but have no effective means of gauging the actual usage of these services. Such a lack of transparency makes the job of managing market data and information services a real challenge.
This is further exacerbated by increasing numbers of service subscriptions and the fact that many new data services are increasingly delivered via the web rather than traditional desktop applications or feeds, all while budgets are being squeezed
In a recent survey carried out by A-Team Group for TRG, we found that two-thirds of financial services firms do not believe they have enough transparency into the actual consumption of the information services they pay for. This makes the job of managing market data and information services a very real challenge.
The findings, which are contained in our white paper Optimising Market Data Subscriptions with Usage Monitoring, also show that while 79% of firms do some kind of tracking, current methods of relying on vendors or asking end users, are just not effective. Without this knowledge, trying to cut the costs of data subscriptions can be a rather random affair.
This is demonstrated by survey respondents saying that a lack of accurate and automatic tracking of information services usage leads to an inability to effectively manage or reduce spend, concerns around compliance with data vendor contracts, inefficient processes of collating information about service usage, and a lack of confidence in cutting services.
The adoption of web-based data services further muddies the water, but must be addressed as firms continue to increase their use of web-based information services compared to installed or desktop applications. With 20% of firms surveyed already spending 51% or more of their data services budget on products that are delivered via the web, the problem of controlling access and monitoring usage can only escalate. Growing numbers of data suppliers also add complexity.
For those firms keen to optimise information services subscriptions, emerging automated approaches can significantly improve data managers’ understanding of the usage of information services that their firms are paying for and give them the ability to identify cost savings – the most beneficial outcome of being able to track usage, ahead of improved transparency, according to survey respondents.
If identifying cost savings and improving transparency across all types of data services are the desired end game, there are ways to get there. TRG favours a simple five-step process that:
- Encourages market data managers to evaluate their current approach,
- Discuss potential business cases with stakeholders such as compliance and procurement
- Talk to business managers whose bottom line could benefit from better tracking of information services
- Work with solutions experts to develop metrics around the costs of services
- Evaluate usage-tracking software that can automate tracking and usage – and deliver the end game.
To find out more about how TRG’s Research Monitor can deliver detailed usage tracking to help you optimise your information services spend, get in touch with our CRO Leigh Walters: firstname.lastname@example.org.
To read more about the full findings from our survey about optimising market data costs with usage tracking, you can download the full white paper here.