What does it take to stay ahead in the world of investor relations? Information – and lots of it.
Christine Lennon has an insatiable appetite for information. ‘There’s really no limit to how much information we need,’ says Lennon, vice president of corporate communications and director of investor relations for BioChem Pharma in Montreal. ‘Unless someone comes up with a new drug, we’re still going to need sleep, though. There’s only so much that you can compute.’
Lennon’s dilemma has become a fact of life in IR. The days of ‘just answering investor questions on the phone,’ are long over, according to Carl Thompson, CEO of Carl Thompson Associates. The need for up-to-the-minute information will only increase, and to get it, IR professionals have been adopting new tools and strategies.
‘You can’t underestimate the changes that this profession has undergone,’ Thompson says. ‘It’s really about business intelligence today, in all its forms – from following the daily movements of the markets, to communicating with clients and partners, and monitoring competitors’ stocks and strategies. The whole idea is to anticipate the markets and help your company create a strategy before things happen.
‘It’s kind of like running a little CIA,’ suggests Richard Wines, senior managing director of Thomson Financial Investor Relations. ‘The investor relations community doesn’t just want numbers, they want to understand the mindset and behavior of their competitors and investors. And a lot of that is on the internet.’
Ear to the ground
In fact, when IR people put their ears to the ground today, says Thompson, it’s usually on the web. ‘The internet allows us to do our jobs much more quickly. I’m in and out of the net all day, and I doubt there’s anyone in this profession who isn’t as well.’
Indeed net surfing has become a normal part of their daily IR routine. ‘It has become the standard,’ says Gary Patten, CFO and investor relations director for RockShox, a San Jose, California-based bicycle components manufacturer. ‘Services like Bloomberg aren’t really a big focus for us. We subscribe to Bike Information Services, which is hard-copy, but in the long run, I’d like to get everything over the internet. Time is a commodity.’
The problem is making the most of that commodity. The same thing that makes the internet so valuable as an IR intelligence tool is also its great weakness. You can find almost anything under the sun on the net if you look long and hard enough, but finding something really useful can be a challenge.
According to a survey by Menlo Park-based Network Wizards, there are now almost 50 mn internet hosts, up from 30 mn last year. By 2001, that number is expected to reach 100 mn. That’s a huge amount of information. How much? In April last year, the NEC Research Institute found 320 mn individual pages on the web. You can probably add at least half as much again by now.
Lost & found
‘It’s easy to get lost on the internet,’ says Estelle Metayer, editor of Competia, a Montreal-based online competitive intelligence publication. ‘You have to have a methodology, and you have to know how to use the filtering and research tools that are out there.’
Although most internet users learn how to wring information out of online directories like Yahoo and search engines like Altavista and Infoseek on their first day in cyberspace, Metayer says that IR professionals have to take their searches one step further.
‘Much of the time, when you’re talking about the kind of intelligence you need in investor relations, you’re talking about monitoring information over a period of time,’ she says. ‘In IR, you’re watching your investors, your competitors and your industry as a whole, and you can’t do that by logging in and out of the internet 20 times a day.’
NetMind, a Campbell, California-based company, has a solution. Subscribers to its free Mind-It service can passively monitor changes to almost any web site on the internet. ‘What you’re really looking for when you’re monitoring anything is change,’ says Kelsey Phipps, NetMind’s senior vice president of marketing. ‘If you want to know what your competitors are up to, you just have to tell Mind-It to let you know when they update key pages. If you’re monitoring news or analyst reports, you can set Mind-It to notify you every time your company name is mentioned on Bloomberg, for example.’
There’s news and information ‘everywhere on the internet – more than you really need,’ Phipps says. The key is to filter it so you get what you need. Mind-It sends its notifications through e-mail, or lets users check-in on their personalized My Mind-It page. Mind-It Pro, a paid service due out at the beginning of next year, takes that a step further, by supporting notification via two-way pager and personal digital assistants like 3Com’s Palm.
It’s an approach that appeals to IR professionals, even though NetMind hasn’t yet specifically targeted the market. ‘You have to have something to track changes on the web,’ Lennon says. ‘It’s a question of being plugged-in and ready to receive.’
Push & shove
In fact, push technologies have become essential IR tools, says Barbara Domingo, IR director for IXL Enterprises in Atlanta. ‘There’s a lot of push out there,’ she says. ‘I’m signed up to Free Edgar; some people here get all of the press releases or monitor the web through services like NetMind. If it doesn’t turn up on your desktop, you won’t necessarily know about news or events until it’s too late.’
Part of NetMind’s planned pitch to the IR community will be Mind-It Pro’s sophisticated management features. Subscribers will receive copies of the web pages they track, with the changes highlighted, and they will be able to prioritize how they receive notifications. ‘The category we’re leaders in is personalization,’ Phipps says. ‘You’ll be able to have the breaking news sent to your cell phone or pager, less important notifications in e-mail, and information that isn’t time-sensitive just on your My Mind-It page.’
However, Jesper Ejdling, COO of Comintell in Sundbyberg, Sweden, says getting the information to the desktop is only the first step. ‘There’s a lot of information out there, but there’s a lot of junk as well,’ he says. ‘The key to using it is knowledge management. You have to control your sources and you have to control the flow of the right information to the right people so they can act on it.’
In a sense, knowledge management is the opposite of searching, that time-honoured and often largely fruitless internet activity. It’s all about knowing exactly what you’re looking for, and using that to create a context for information.
‘Searching is what you do when things are scattered at random,’ says Dora Futterman, product marketing director for Infoseek Corporation. ‘But that’s not enough. When you’re at Campbell Soup and you’re looking for ‘stock,’ is that soup or securities? You really need some kind of hierarchical directory as well.’
Using Infoseek’s ‘ultraseek server’ technology, Comintell builds sophisticated knowledge management systems which allow it to manage its clients’ business intelligence needs. Ultraseek automates most of the indexing process, and Comintell brings its years of information-handling experience to manually manage the rest.
‘The truth is that the last manual part of the process is the really difficult part,’ Ejdling says. ‘Knowledge management is a huge investment. It’s difficult and time consuming and it costs money. It’s hard to measure, and it can take some effort to convince companies that they need it. But investor relations people are very receptive. They know they need it and they’re often the ones who make sure their companies make the investment.’
Inside out
In effect, knowledge management brings control of the internet inside the corporate network, giving the information-dependent workers in the investor relations department – and elsewhere – control over how they access the information they need.
A high level of control is, in fact, the main selling point of traditional information resources. ‘I don’t think there is an IR department in the industrialized world that doesn’t subscribe to Bloomberg or Thomson Financial’s First Call, and probably both and one or two others besides,’ Domingo says. ‘They’re edited and organized, and they’re focused. I don’t have to go through a lot of information I don’t need to find analyst reports.’
Indeed, traditional resources like Bloomberg and Thomson Financial are leveraging their strong content to keep pace with both the increasing information demands of investor relations and the availability of information on the internet. Thomson, for example has just begun to outsource its IR Universe service. Once available only over the network as a subscription-based service, Thomson unveiled a new version of IR Universe that can be installed on a subscriber’s own network, or hosted by a service provider.
‘Over time, virtually all of the information investor relations professionals use will be consolidated in this kind of model,’ says Richard Wines at Thomson. ‘This way, each company can change, update and annotate the information to suit their own needs or their clients’ needs on the fly.’
Nevertheless, Wines is quick to point out that there is no longer such a thing as a one-stop shopping solution for business intelligence. ‘We recognize that the profession has changed, and along with that, so have our customers’ needs,’ Wines says. ‘The resources available today for IR have really become myriad, and most departments are wired.’
