Cut costs, not corners

Richard Quigley
CEO, DataGenic Ltd.

As the global economy continues its relentless contraction, the costs of operating a company's services come under the microscope. Nothing focuses the CEO's mind better than the potential of business failure; a hostile takeover or simply losing market share.

In my many conversations over the past 17 years with traders, risk and IT management, there is one thing that I find bewildering and frustrating - the tacit acceptance of the old adage: "If it ain't broke, don't fix it." There have been countless times where the incumbent software package deployed is technically bereft, functionally poor and may even cost more than the nearest competitor. However, it may take a cleverer person than me to work out why the collective brain power and intellectual prowess of these talented individuals manifest itself into irrational exuberance?

Because a software package has "always been there" does not make it fit for today's challenges or tomorrow's unknowns. It doesn't make it effective or indeed efficient even in the right hands. Most conversations relating to why they won't buy another product tends to be around the "my staff don't have time to learn a new system", or "we find workarounds to the stuff we would have liked it to do", or "the account manager is great and does her best" or "Bob the trader likes it and he has a lot of power in the company". I've heard them all!

As the CEO of DataGenic, my mandate from the board is to ensure the future prosperity and profitability of our company. Thus, the challenge is fairly simple to me. Review the costs that are required to sustain this company in the tough period ahead and ensure that the services that we offer are value for money, whilst uncompromising in their richness and return on investment. As a services company in the data management arena, DataGenic is well positioned with our innate knowledge of software, utilities and services that are either low cost, or indeed free. We have ensured that our products can be offered to clients without additional Database or Web Server Licenses. We have also ensured that all our core development is undertaken in Bangalore, India, with exceptional quality control measures in place. Our low costs are passed on to our clients - in good times and in the bad.

So what have we achieved in 2008 and now offer to our clients for 2009?

• Ensured our flagship product, Genic DataManager, is available in 3 Editions. Available now for a fraction of the Enterprise license costs for small to mid-size companies - who simply don't require all the bells and whistles.
• Zero IT footprint, web-enabled desktop decision application for traders and data analysts for access to over 150 data sources from the world's leading exchanges, brokers and assessment providers.
• Our managed data service, Genic DataHub, now offers clients the ability to simply download their licensed data directly to their own application or database server.
• Full ASP/SaaS model offered to clients who simply understand that companies such as DataGenic have the ability to provide economies of scale with these services and give them a better deal than internal hosting. The added bonus is that system and data maintenance costs are shifted to the vendor (us) with a bespoke Service Level Agreement (SLA) in place to ensure minimal service requirements.
• All software is architected for flexibility, scalability and performance. It is no longer acceptable that a system should be a 'black box' and comes with proprietary databases, and high level programming languages. It needs to be, and clients demand, Service Oriented Architecture (SOA).
• On average over the last 3 years, 35% of our turnover is spent on Research and Development. At least 25% above the average for the industry and something we are proud of and our clients are enjoy.
• Breaking the mould with our support offering: Our standard SLA provides client with a target resolution of 4 hours on Critical 1 issues.

My question to all CEO's, senior managers and business sponsors: Can you afford to accept the norm? Can you afford to accept that "If it ain't broke, don't fix it" in today's landscape? Isn't it time, we stop getting carried away with the latest 'management wisdom' that encourages the consolidation of vendors, thereby accepting mediocrity. The idea that your vendor partner of choice will develop in partnership with you and your business pace is a utopian view, not often realised in the real world. Encourage your managers to review the offerings from multiple vendors: small, medium and large size alike. You are after the best bang for your buck so why settle for second or third best?

You can cut costs in a global downturn but you don't have to cut corners!