Sector spotlight: Information services
Scaling information services businesses can reap handsome rewards if done correctly. Inflexion recently brought together a group of industry experts to discuss this, with Jim Dyer, a Data and Subscription Service Strategy expert, leading the discussion.
To create a saleable business product, you need something that is unique, hard to copy, and relevant. Inflexion has worked with a number of businesses to build market-leading global information-as-a-service companies, and Jim Dyer, Chief Commercial Officer of travel data specialist OAG, reckons with all three you can truly scale successfully.
His sentiment is based on extensive experience: In addition to his role at OAG, he is a former non-executive director at Kynetec, a data and insights provider to the animal health and agriculture markets backed by Inflexion for five years until 2021, and he’s served as Chief Commercial Officer of Wood Mackenzie, a leading research and consultancy business for the global energy, chemicals, metals and mining industries.
For firms providing information services, operating in markets with volatility and changes in frequency can provide opportunities. This is because complexity creates a need for clarity, which data can provide, and new insights can help firms to navigate this – which in turn drives demand.
“While all industries can play with information, there are niches within industries where data plays a more fundamental role, so it’s useful to go a bit deeper and look for problems that are ‘relevant’ to enable you to create a ‘unique’ and ‘hard to copy’ dataset,” Jim explains.
His expertise leads him to caution that to think about an industry within a silo may mean to miss a greater opportunity. “Identifying common problems where the same data may be the answer to many industries or sectors can form a great ‘to the many’ strategy,” he says, which is what guides OAG’s data development. “If the data is relevant to many use cases and in many sectors, you gain real potential to scale.”
The right stuff
The channel to market is crucial, and an adequate sales organisation requires a true understanding of the complexity and make-up of the opportunity set as well as the nature of the potential customer and its potential worth to them. “It’s no good having an expensive account management team if the lifetime value (LTV) of the customer is only $1,000. The type of sales and marketing function must be set by a commercial strategy that delivers on the customers’ need. This determines the type of people and technology you require,” Jim explains.
Indeed Kynetec’s wide range of blue-chip customers necessitated an impressive and capable team. As a result, Kynetec boasted more than 250 research professionals, 250 skilled interviewers and a network of more than 80 partners spanning 30 countries when the firm was sold to a US buyer in 2021.
The quality of data at any information business is paramount and supersedes speed to market and product offering, according to Jim. “At OAG we know that there is a huge demand for data in the travel industry, with abundant data around for many years. But the data doesn’t all have the same value, nor is it all equal. This means quality – whether accuracy, completeness or freshness – is vital.”
The firm has shifted its focus away from niche functionality or specific product and towards more high-quality data accessible via a configurable platform as third-party analytics such as Tableau or PowerBI have moved the goalposts. “This helps improve OAG’s speed to market and ongoing maintenance costs,” Jim says.
Providing complete information is key to win custom, and that often means capturing a global dataset. Following Inflexion’s carve-out of Kynetec from its German listed parent in 2016, the purchase of the agriculture and animal health business of Ipsos North America was announced shortly after and strengthened Kynetec’s presence in the US and gave it fresh footing in Canada. Ipsos was the first of a number of acquisitions for Kynetec during its five-year Inflexion partnership, all of which helped the firm to grow geographically and in big data. Alongside a substantial organic investment in big data.
Overlaying the data with tech can help to make the most of it. Kynetec for example expanded heavily into big data, including organic investment as well as the purchase of Neil Clark & Associates, an Australian provider of agribusiness data and business intelligence. This acquisition turbo charged Kynetec’s technology offering by enabling it to offer deeper insights to clients.
OAG has also experienced the positive impact technology can have on the power of data. OAG’s Metis platform allows the firm’s customers to retrieve fresh, complete, and accurate joined-up data in an accessible and flexible way. It also allows OAG to gain new customers by quickly and easily creating new offerings to draw them in with.
“It’s clear that data and technology can come together to deliver strongly on a great commercial strategy,” Jim concludes.
Information services forms part of Inflexion’s Services sector focus. Inflexion previously invested in agricultural and animal health data company Kynetec, which saw EBITDA increase 400% driven by five acquisitions in the UK and internationally during Inflexion’s ownership. Inflexion is currently supporting the growth of university rankings-focused information services specialist Times Higher Education and legal rankings leader Chambers and Partners.