Managing Different Service Provider Costs in Today’s Subscription Economy 💰
Financial institutions consume a broad range of services in order to meet their complex business needs in today's subscription economy.
These range from market data and electronic information services, to subscriptions for print and web-based publications.
But as firms look to minimize staff costs and capital expenditures, other services are increasingly consumed on a subscriptions basis, whether it’s consultancy services, software or something more physically tangible like telecommunications services and hardware.
In each of these cases, firms can benefit from proactive management of these service subscriptions.
As mentioned above, many firms still rely on complex spreadsheets or other tools supporting manual processes to manage their subscriptions.
By automating inventory management across the range of subscription services, firms can eliminate these manual systems and save time, money and resource 📉
Automating inventory control allows firms to analyze existing costs and predict upcoming spend relating to information and subscription services consumed across the enterprise.
This in turn supports accurate reporting of usage and cost data to your users, financial controllers and auditors, allowing you to deliver on cost transparency, and manage risk and compliance.
Finally, this approach supports supplier negotiations with evidence-based intelligent, helping to optimize contract renewals.
This approach to proactive inventory and subscription management applies to services across the board:
Market Data Inventory & Cost Management
Gaining control over data inventory through automation can allow firms to transform the way they manage their spending on market data and other information services.
What’s needed is the ability to track, organize and calculate costs related to all vendors, contracts, products and users 📊
In this way, firms are able to achieve cost optimization, process efficiency and compliance with licensing agreements.
Index License Management
The volume and cost of index licenses are mushrooming, making it difficult to manage licenses manually.
At the same time, contracts and vendor relationships previously owned by the business are being transitioned to central control.
This translates into a need to accurately track index licensing commitments, allocate costs, reconcile invoicing and provide cost transparency back to the business.
Research & Information Services
Firms need to be able to track and analyze their research and information services spend across the enterprise in order to manage costs.
But as with market data and index licensing, research and broader information services are becoming too complex to manage by spreadsheet.
This complexity means that firms need to automate their inventory and control systems for enterprise subscriptions in the same way they do for market data and other premium services.
This is particularly true as regulations like the EU’s MiFID II start to dismantle the bundling of research with execution services, forcing consuming organization to pay and provide transparency around the research they consume.
Software License Management
This level of discipline and control also applies to software licenses.
Undocumented software can pose risks to the firm, and lack of transparency around licensing obligations can result in unforeseen costs and penalties 📈
Firms need to accurately track the software licenses they have purchased.
This can yield benefits in terms of better visibility into spend, management of software license costs, and compliance with licensing agreements.
As firms seek to transpose capital expenditures into operational costs, many are seeking to license hardware, in effect creating a subscription stream that needs managing.
But even where that isn’t the case, understanding the current status and usage of hardware platforms and associated operating software can reduce risk and help allocate costs to the business more accurately.
Consulting and Legal Services, and Expert Networks
Firms need to track and report on pre-paid balances for consulting and legal services consumed across the enterprise, as well as for services provided by so-called expert networks.
Additionally, for the latter, firms need to trace and allocate individual transactions back to specific deals and projects.