The full story
Subscribing to change
Swets is a content broker. Now while this business model worked well in a non-digital world, it’s become a little more problematic as instant access and online data sources have become so widespread and popular. Swets management is turning the business upside-down to find a way forward, and local management are doing their utmost to manage the changes.
Swets is a global market leader in the sourcing and delivery of scientific, technical and other specialist information. They have been around in one form or another for over 100 years having been founded by Adriaan Swets and Heinrich Zeitlinger in Amsterdam in 1901. They offer subscription and content management services to libraries, information points and other end-users in 160 countries and from 27 offices worldwide. Currently holding 39m articles, over 1m ebooks and 350,000 journals in their database, their operation is global and massive.
Originally the company was a bookshop selling books in the conventional way from a traditional store but over the years it developed into a subscription agency providing services, principally to libraries, sourcing and providing publications and material on a contract basis. Obviously the digital revolution has had a profound and far-reaching effect on their business over quite a long period of time now and this has thrown up a series of significant challenges.
Content is still king
Katleen D’hanis is Electronic Product Manager for the group’s Belgian and French businesses. She has been dealing with the changing environment and Swets’ response to it for some years. “What we are now is essentially a content broker. We source, categorise and curate the information so that other people can access it easily, with confidence and accuracy. Our customers are still the libraries and information providers but increasingly end-users are becoming aware of the advantages of the wide range and specialised nature of our service. The principal core of the company is still business-to-business, though a wider range of businesses and information users are clients now.”
“Technological changes have meant we have had to constantly update and upgrade our capabilities to keep up with the market and offer it what it needs and wants. Everybody wants information instantly – and free; especially the younger generation (digital natives as we call them) who think all information is available free on the web. What they don’t realise is that everything online isn’t necessarily right or accurate. It’s normal, you have to pay a premium for information that is verified, quality-checked and classified making it accessible, relevant and useful. We see our job as getting the right information to the right people, quickly and easily. Naturally, there is a cost attached to that – you are paying for the confidence that what you’re getting has been vetted and is genuine and authoritative.”
Innovate to survive
“As the environment and the channels change we have to keep up - and even try to get ahead of the market. It’s a continuous battle to innovate and adapt. Our business is mostly digital now but even with the bulk of our systems switching to support this, it still doesn’t mean we can stay still. Fortunately, we have begun developing partnerships with other organisations to produce products that the market is demanding and that will give us a competitive edge moving forward. We see this as being one of the ways we can develop and progress in the current market conditions.”
It isn’t only on the technological and product front that there are challenges; tremendous commercial challenges have faced the business in recent years, not just fuelled by technical change, but also the economic environment that has affected all business, government and academic markets. Perla Van Belle, Commercial Manager of Swets, reflects on some of the problems they have faced. ‘Even though Swets is such a major player, especially in the domestic market, we have faced considerable difficulties with the business. We have a diverse and well-segmented customer base – but most of our conversations with companies over the past few years have been around the same topic; how can we reduce our costs by 30, 40, 50%? We still have our academic and government customers – but there are pressures there too to reduce costs. And within the next year a third of our entire business will go to tender which is a big threat and challenge to us. Tendering is a lot of work, with long timescales and it requires structure and process – fortunately this is playing to one of our strengths.”
Competition breeds creativity
“A bigger threat to us though is customers going directly to suppliers and cutting us out – disintermediation we call it. They can negotiate discounts directly and it makes it difficult for us to compete. In situations like this, we still try to maintain some presence and contact with the client by offering other services like invoicing – this keeps us in the mix; because once you are out you never get back. Academic institutions in particular don’t have the staff and knowledge to do all the necessary ancillary work, which is where we can offer some added value, even if they want to buy direct.”
“It means we have had to respond to market pressures by reducing our costs and reorganising. The fact is our staff complement was cut in half eight years ago but already four years later there was another restructure. A lot of the back office work was moved to the UK and that hub has grown to become a second HQ for the international business. This move was driven mainly by costs.”
“What we have to focus on is what we can bring to the business locally,” explains Van Belle. “This doesn’t just mean having a local perspective though, as sometimes ideas from local sources have international applications.”
Research is the key
D’hanis agrees; “Decisions might be made in Holland but they are influenced from all over. It isn’t only local staff who can bring insights and ideas; local customers often have a perspective or need that can lead to a new product or operational development that is beneficial to the whole organisation. Company wide, Swets now uses a software called ‘Salesforce’ – this is a way for us to discuss ideas and have them quickly disseminated and debated around the worldwide organisation so any relevance or application can be swiftly identified and exploited.”
Van Belle adds; “We are quite lucky in the Belgian office in that we are a fairly small, contained and very cohesive unit so we are often used to pilot or trial ideas or projects. We therefore tend to be at the forefront and sharp end of developments, which makes our lives interesting and stimulating.”
Changing the view
How do Swets relate to Vlerick? “ Well, they are one of our customers,” says D’hanis, “but they are also a business partner. They have knowledge and insight that can help us in developing the business but also, potentially, in creating new products or content.”
“Their business training too was very useful,” Van Belle confirms. “I got a lot from it and made useful contacts - not just from the training but from the networking events as well.”
“I always think communication is the key when it comes to managing change,” Van Belle says. “You need to communicate a clear vision and let people know what is happening and why. We expect a lot from our staff now; they have to do more, and they have had to adapt. Many have been with the company for many years and have seen great changes so they are not doing what they were when they first started. And with the changing market and customers, and the reductions in staff, greater volume and more varied work is asked of them. We have to constantly motivate them and it can’t always be financial; so we have to find other ways to keep people engaged.”
“It’s clear that the current CEO intends to turn the business upside-down over the next couple of years. He understands that we need to develop new products and services as our subscription business dwindles. That means there are a lot more innovative projects now and these will, hopefully, lead to exciting new products and services in the near future. We are aiming to be a different company by 2015. I am sure that organisations like Vlerick can help us on several levels in this process and that is probably the way we will go, doing joint development and creating partnerships to find new products and channels.”
A word from Vlerick
Marion Debruyne: The story of SWETS clearly illustrates the upheaval that the digital transformation creates for established companies. Not only do they have to adapt technologically, they have to rethink their entire business model to not become extinct.
As we know: “it’s not the strongest of species that survives, but the one most able to adapt.”
At the same time, it is also clear that this new environment, one where information is abundant, and consumers find it ever more normal to have immediate access to information, also creates a lot of opportunities. First, when there is ever more information than ever available, it is becoming increasingly difficult for customers to find their way to the right information, and to vet it to judge its validity. Second, information accessibility ensures that there is an expanding user base that engages with it. As the story of Swets demonstrates, this means rethinking the value proposition, rethinking the customer base, rethinking the value chain and rethinking the profit model. In other words: rethinking the entire business model!