7step of Sourcing
Sourcing
By Helen Clegg and Susan Montgomery
Sourcing information products is a complex exercise involving many variables. In today’s uncertain business climate, information budgets are sensitive to scrutiny and constantly under threat. In many cases, information professionals are faced with trying to get more value from suppliers with a flat or reduced budget or contending with a “now we have it, now we don’t” scenario. What’s more, there is a lot of rival content available from the Internet, making it more difficult to justify expenditure on pricey products. As a category, information products pose a number of challenges to the information professional tasked with sourcing them. Information products constitute a complex category because they are difficult to compare on a feature-by-feature basis. Although there may be considerable overlap among the content offered and the products purchased, each one has certain unique features and a core group of users who consider these different products indispensable to their work. User needs can differ too, adding to the difficulty of comparing one product with another. In some segments of the market (real-time stock market data, for example) there is a virtual monopoly, which limits the relative power
34 | information outlook |December 2005 | vol. 9, no. 12
Sourcing of the buyer. In the case of online news services, the tool itself, as well as the content, must be evaluated. Furthermore, the rate of product enhancement and innovation in this category continues to increase as vendors seek to sustain their current customer base and capture more market share. The pricing structure of information products is another challenge. There is little transparency when it comes to pricing policies and they are constantly changing. Every information provider has its own pricing structure and all are reluctant (indeed, may refuse) to discuss their cost structure. For example, what margin is an information provider making on a
By Helen Clegg and Susan Montgomery
Sourcing information products is a complex exercise involving many variables. In today’s uncertain business climate, information budgets are sensitive to scrutiny and constantly under threat. In many cases, information professionals are faced with trying to get more value from suppliers with a flat or reduced budget or contending with a “now we have it, now we don’t” scenario. What’s more, there is a lot of rival content available from the Internet, making it more difficult to justify expenditure on pricey products. As a category, information products pose a number of challenges to the information professional tasked with sourcing them. Information products constitute a complex category because they are difficult to compare on a feature-by-feature basis. Although there may be considerable overlap among the content offered and the products purchased, each one has certain unique features and a core group of users who consider these different products indispensable to their work. User needs can differ too, adding to the difficulty of comparing one product with another. In some segments of the market (real-time stock market data, for example) there is a virtual monopoly, which limits the relative power
34 | information outlook |December 2005 | vol. 9, no. 12
Sourcing of the buyer. In the case of online news services, the tool itself, as well as the content, must be evaluated. Furthermore, the rate of product enhancement and innovation in this category continues to increase as vendors seek to sustain their current customer base and capture more market share. The pricing structure of information products is another challenge. There is little transparency when it comes to pricing policies and they are constantly changing. Every information provider has its own pricing structure and all are reluctant (indeed, may refuse) to discuss their cost structure. For example, what margin is an information provider making on a