Case Studies
EVALUATING LARGE SUPPLIER FOR INVESTMENT MANAGEMENT COMPANY
BST was engaged to evaluate a large securities pricing supplier prior to the renewal of the multi-year contract. The client authorized us as their agent to conduct the negotiations on their behalf. Our analysis included benchmarking the pricing against the industry and reviewing all terms and conditions as well as renewal options for future years. The result of this negotiation resulted in a material reduction in fee levels representing ~$1,000,000 over a three-year contract. In addition, we simplified the fee model from a month-to-month multiple variation of fees methodology to a fixed monthly fee that enabled the client to budget for the full three years.
KEEPING MARKET DATA SUPPLIER HONEST FOR MULTINATIONAL FINTECH COMPANY
BST was hired to analyze the contract, inventory and usage for the firm’s largest market data supplier; over 50% of the firm’s market data expenditures are spent with this supplier for its pricing and reference data and related services. Given that the firm has numerous financial technology platforms offering a variety of products in Merchant, Banking and Capital Markets solutions, there is high volume use of this supplier with many of its products integrated within the firms’ systems. The project included a full-scale investigation of each platform’s use, contracts, costs, and terms as well as how their end-user customers were subsequently charged for the downstream use of the data. Analysis of the data revealed many instances of duplication, where products/services were purchased multiple times across the organization. In addition, BST discovered disparate pricing for the same services, varying discounts in different contracts and inconsistency in terms for similar use. Over an 18-month period, the analysis provided an opportunity for negotiation and renewal with millions of dollars saved across a new multi-year contract.
ANALYZING FINANCIAL SERVICES COMPANY MARKET DATA INVENTORY
BST was hired by a financial services company to analyze their market data inventory system contents and the workflow process used to manage, maintain and report on the data. We first interviewed all staff including those people onsite and close to the stakeholders as well as external staff located in India. The objective was to understand each person’s role, how each fit into the overall methodology and determine if strategic changes would improve the quality of the data, the expediency of actions associated with the process and accuracy of the reports provided to stakeholders and accounting. Our consultants found multiple data quality, compliance and process issues and provided the firm with a full-scale recommendation to achieve best practices. This recommendation included staffing, role definition, reporting realignment, process changes, and advice focusing on changing cash accounting to accrual. Subsequently, the firm hired BST once again to project management the cash to accrual change. This change enabled both stakeholders and the Finance area to have “true” transparency across all market data expenditures throughout the firm.
FULL VENDOR INVENTORY ANALYSIS
BST was hired by a global investment bank to perform a full vendor inventory analysis. The objective was to collect all inventory and related contracts prior to implementing a new market data inventory system for full transparency. Our client provided us with a complete list of all offices, subsidiaries, and affiliates where their ownership met or exceeded 50% and gave us access to their Accounts Payable files so we could identify all the vendors that provided data to the firm. BST provided the subsidiaries lists to their vendors and requested that they forward the documentation that represented all business between the vendor and the client. Over the course of several months, BST obtained and analyzed all data received, reconciled discrepancies, matched contracts to inventory and invoices, created documentation on a per vendor basis and provided the data software provider for upload into the market data inventory system. The result was a detailed view of all expenditures by user, by vendor, by business unit, and full transparency of all market data in use across the firm.