On Demand Research – an imperative for the organizations
Business Research happens in corporates in multiple pockets. Vendor management groups do vendor and credit research, sales teams do prospect and client related credit research, risk group performs credit research and CXO’s & Business heads need competitive analysis, trend analysis, industry analysis etc.
Unlike financial firms where research units are ring-fenced, in non-financial corporations, research need exists in a finger and toes fashion – multiple people including senior management conduct research and analysis for a short fraction of their time. This poses multiple challenges. It exists as a significant hidden cost and worse still, it is a fixed cost. There is significant turn-around time implications of not getting a piece of research in time but given the nature of the current model, turn-around time does not get the right focus, thus significantly impacting business decisions. Research requirements are not uniform across the year and have seasonal peaks during the budgeting & planning cycles or at quarter-ends. The process is not standardized or metricised and the output is neither templatised nor stored and indexed from the knowledge management perspective.
Even after recognizing these imperfections and the significant research effort within organizations, centralization of this effort in the form of a shared service is difficult from the perspective of change management given the finger and toes nature of the activity.
Creating an on-demand model for research can enable firms to provide a platform for slow transition of the in-house research activities. Transition will be slow and need based. Need will be high during the peaks. Soft management nudge can be provided by reducing staffing budgets or by putting KPI’s and targets for the on-demand services, though significant value will need to be demonstrated by the delivery model in terms of quality, timeliness, productivity and knowledge management of the research. The workflow needs to be simple so that the whole model is extremely simple to use. Reporting around use of the on-demand model to the senior management would be a significant benefit and in our view, even the research requests to the internal teams should be logged in order to gather metrics.
By adopting the on-demand model, firstly, the firms would be able to understand the research effort within their organizations. They would be surprised by the magnitude of this effort, that’s for sure. In the medium term, fixed costs can be converted into variable costs, Significant productivity advantages can be achieved due to consolidation of the teams, standardization, knowledge management and templatization. Finally, this can be a model that can enable firms to embrace creating shared services in knowledge processes like research, analytics and any other complex pieces of work within the organization – that have required huge internal management efforts in terms of change management and have been difficult to define.
