by Stefano Caporusso

Everyday, in any kind of business, negotiations take place between suppliers and clients. Smart people confront each other in the marketplace, discussing and trading all sort of goods or services. For all of them the same rules apply: those of the marketplace. It's the market that generates the driving forces. In the information industry this hasn't always been the case, for reasons that are not going to be analyzed here. Today, the world of information is living an extraordinary momentum of expansion and success, but because of that, the old, traditional rules and practices are no longer valid.

One of the major "manufacturers" of information is the industry, with its research, innovation, technical publications, and patent applications. The same industry happens to be, simultaneously, one of the major "consumers" of information. This is why it is important to present the point of view of a user organization from the industry. This view is based on situations and problems which we have experienced, as well as an analysis and vision of our world today's futuristic existence.

The Environment Around Us

Nowadays, there is a noticeable major change in the information activity: the shift from COST to VALUE.

Information has been seen so far as something that could be obtained for free by the end-users--the employees of an organization. Now it starts to be considered as something that bears a price.

Traditionally, in the end-user organization there is the Information Unit on one side which supplies the information at the lowest possible costs and the highest possible productivity. The end-users (i.e., the "clients") on the other side receive data, information--unprocessed or organized-- and get support and answers by the information professionals, be it a search, an alerting service or a compilation of a database.

One of the most curious dilemmas is the following: why is information considered as a cost by the corporation, and free by the clients? Perception is the answer.

The clients perceive the services as "free", while the corporation perceives them as a pure "cost". The result is that sometimes information and its related activities are seen as an expensive or even an unnecessary burden by the "active" part of the organization (namely the Business Units). It is naturally assumed here that all the skills, time, efforts, equipment, physical facilities, information network, external connections, and suppliers are taken for granted. There are only few individuals who occasionally recognize and appreciate what is behind the results provided by these services.

The consequence of this process, where the ownership of the information passes for free from the supplier to the client directly, is that the latter is unable to know and to judge the work involved, its quality as well as its value.

In the new scenario, the client is taking responsibility for what he needs, wants, and chooses to pay for. For example, we can take a client who directly accesses information that will be used immediately, has been evaluated for its relevance, and has been selected in its best parts. The client knows exactly the destination of the information, knows its costs, and then decides to purchase it.

In this scenario, information gathering becomes part of everyone's job--daily or hourly. As a matter of fact, this happens already with alerting services that let the news pop up onto the screen by the minute, like real-time financial information. For example, the information provided on the Nasdaq Stock Market (high-tech New York Stock Market) Internet home page changes every six seconds!

Another example is a client who needs and requires technical information as "prior art" to support a very bright idea that might turn into a patent application. The information and the service to find it ought to be priced internally within the organization, exactly as much as it would be priced outside, in the marketplace. This is a good way to ascertain the value of the required information product. It is reported that a brilliant scientist, after having heard that a patent search would cost money to his department--instead of being delivered for free--decided to run a few more experiments in the lab to further test his idea. He came back later, fully aware that his project was worth enough to have a patent search done and to spend an adequate amount of money for it.

This way, there is a shift taking place. Information is no longer seen as "free" for the end-user and as a "cost" for the corporation; now the price for its usage helps to measure the value associated to information and to the related services used to obtain it. In the former situation, there is a steady problem regarding the budgets available to the Information Units, always too big and never decreasing enough for the organization. This causes doubts about the necessity of new contracts. However, from the suppliers' point of view, the budgets allocated don't increase enough at the time of contract renewals, as they don't pay back the new product developments, enhancements, better coverage, and quality. Now, pay-for-value is a new and more flexible concept, where the client has more options to choose and is more responsible for what he takes. At the same time, the supplier has more opportunities than before to follow its customers closely and has more responsibilities towards them.

A true story: A top manager admitted he had been looking for some information for two weeks--that's quite expensive. Did he have a budget for his time?

New Types of Relations

Another shift is also taking place among the supplier, the host, and the end-user. There is a move of the Information Unit towards the supplier. In essence, the Information Unit becomes the supplier's agent in its own end-user organization. The information professional works very closely with the information supplier, preparing promotional material, ad-hoc training, tailored information packages, and providing continuous support. Everything for a common goal--the client's satisfaction.

It is a joint effort to understand the needs of the final user, who is the real information consumer.

In this scenario, both the supplier and the Information Unit have significantly changed their role from the past. The supplier now wants to understand the market, to understand how information is used, namely what is used and why. And the Information Unit professional is the means to best achieve it. ("What is used" actually means information content, the stuff that is going to be used by the final client for his decision-making process.) Thus, looking at the market through his agent's eyes, the supplier has better chances than before to see what is really important and valued by the consumer, and what likely will be purchased again.

In Michael J. Lanning's "building market focused organisations" it is reported that to better understand our customers we should experience their life--namely "live one day in the life of the client", feel and experience his problems, participate in his internal discussions. This truly helps to understand what will make a difference for the customer.

It would be as useful to try one day in the life of the supplier too. The information professionals, if they are good agents, are capable to understand the position of the suppliers, their products, and their driving forces, effectively generating a good communication with their mutual clients.

Control or Freedom to Use Information?

There is also a final major shift to be discussed--from control of information to freedom to use information. This occurs when both suppliers and Information Units cooperate as much as possible to facilitate the access to information instead of limiting it. When this happens, the clients are treated as they are--professionals--responsible people that know how to manage people, projects, and budgets. In other words, clients who know what they are doing and who must be treated as such. This happens within the organizations too. Some people managers tend not to give access to new tools or systems (e.g., Internet) because they are afraid that their people would start "playing around" instead of working.

The information professionals must encourage the "client is an adult" attitude, together with the suppliers, for the benefit of their clients and organizations, which will bring their own benefit in return.

How to Promote? How to Encourage?

To best achieve this, the Information Unit should give options and degrees of freedom to its clients by giving them, for example, freedom to choose the type of access or the formats, freedom to easily download the selected information, to circulate it, or to distribute it... Furthermore, the Information Unit should eliminate any possible barriers, really act like agents, do marketing for these products internally within its organization, contacting every potential client as if the Information Unit itself were making part of the profit involved. Therefore the negotiation should take this freedom aspect into consideration.

As an example, sometimes user organizations are confronted with limitations in accessing, or using, information. That helps neither clients nor supplier (e.g., restrictions on the number of simultaneous users of an online system, or a very strict information re-distribution policy).

With regard to the latter point, the clients do not have neither the time nor the interest to read information that is not relevant to their projects, or to their products and applications. Although the reasons behind that restriction are understandable, in practice it is not always sensible to apply it. The diversity of topics and project areas will work as a natural model to avoid excessive information access or downloading.

Moreover, freedom should be related to the recharging mechanisms, that should be crystal clear, easily understandable; mechanisms that should always give the client the option to stop buying the information, or to keep going, when the importance of the project is worth some extra money.

Those suppliers who are able to offer the above depicted scenario despite some short-term investments, if necessary, are the ones who may get the best negotiations and deals with the client organizations, because their target is to try to reach a much higher number of clients (this number is potentially amazingly high).

Such suppliers, capable of demonstrating this kind of innovative spirit and fully understand both the changes occurred and the market, will increase their chances to be successful.

The Negotiation

The actual negotiation? It becomes a pure technicality.

When the supplier and the client do understand each other; when geography is not an issue (local, national, global); when the currency and the bills are not sources of long discussions; when the access or information downloading or re-distribution are not anymore the problem, the negotiation is pure technicality. It is a constructive interaction, a win-win agreement aimed to best supply information to the highest number of clients at a cost, quality and timelines that make it competitive with others. In fact, the negotiation is focused on real issues, such as "How many potential clients are interested?" or "What sort of information packages can be targeted for this or for that client?" Instead of confronting each other, both the supplier and the Information Unit tackle the problem from the same position, to benefit the common client--the ultimate and real information consumer.

Conclusions

Bearing in mind that it is the client that is the true information consumer, it is critical for the Information Unit and the Suppliers to work mutually, when negotiating a contract, to reduce to a minimum any obstacles the client may face. Some of the major obstacles are:

• price of information, which should be transparent and visible to the client;
• access to information, which should be so easy to stimulate new clients to get access to it;
• content of information, of high quality and targeted for the client, shaped with the help of the information professionals within the user organization;
• distribution and circulation of information, which should be "free" within the organization.

Stefano Caporusso is currently Analyst for Commercial Technical and Patent Information for Dow Europe SA in Horgen Switzerland. In his role, he covers areas such as technology watches, competitor analysis, and the European coordination for patent information service supporting all Dow businesses. He may be reached via e-mail at: scaporusso@dow.com.