Courting Capex
Many of our clients — information industry CEOs and senior execs — turn to us for baseline benchmarks and the numbers that keep their boards at bay, or at least in check. For the “CEO of an information management function” in the enterprise, it’s the numbers that tell their CFO or CIO they are performing better than their peer group. When it comes to library, the metrics include spend per employee, content spend as a percentage of budget, or things like user penetration of their services. The good leaders of IM functions understand they have to deliver the metrics that prove their value and do it. They turn to usage data, with our help.
For CEOs in the information industry, the issues are equally large. Each month we do a mini-survey to ask for sentiment on a key issue or to gather important benchmarks to share with clients. It’s not uncommon for a CEO of a B2B media company to ask us about the mix of their revenue and how it stacks up to their peer group, growth in marketer spend in their vertical compared to their growth, and much more. Sometimes, it’s the basics like product IT or sales and marketing, or editorial and content operations as a percentage of costs or revenue. We make it our business to know your business, and this past month we fielded questions about capex (capital expenditures) vs. opex (operating expenses).
We did a quick benchmark of 35 respondents, whose revenue size mirrored the industry. Just over half, 60%, were in the US and the remainder was in UK and rest of Europe.
The main reasons for capex changes are the addition of new projects, revenue growth supporting more spending, or the decreasing completion of one-off projects. Some cut back on capex because they are preparing to sell the business (we don’t recommend that). The most common categories for capex spend are Product IT and Product Development, but since pipes and water are all one now, some capex spends are considered relevant for editorial systems or data and data analytics. Some infrastructure spends like CRM or productivity improvements are capex’d, but increasingly that spend is going by the wayside as forward-looking companies have already done it. The others are late to the party.
Got a question? If you’re a CEO in the business of data or information we have answers. We’re here to support you and watch your back so that when your board or stakeholders come knocking we are there with you at the door. Contact us, today.