Mov­ing on­line

Giv­ing clients what they want, with Africa the growth tar­get

Finweek English Edition - - Portfolio Punts -

THE IN­TER­NET HAS be­come a ba­sic and es­sen­tial tool for mod­ern busi­ness. But when the busi­ness has its roots in sup­ply­ing clients with in­for­ma­tion in print, the tran­si­tion to on­line for­mats is more chal­leng­ing.

By all ac­counts – in­clud­ing fi­nan­cial re­sults – Lex­isNexis is achiev­ing this suc­cess­fully and has gone a step fur­ther by pro­vid­ing com­pa­nies with tools to use the in­for­ma­tion it pro­vides, in­clud­ing risk man­age­ment, com­pli­ance and train­ing. “We need to look at in­no­va­tive think­ing. This busi­ness is chang­ing so dra­mat­i­cally it in­spires peo­ple to lead the busi­ness,” says CEO Billy Last.

Lex­isNexis evolved from the old But­ter­worths, the book pub­lisher fo­cus­ing on the le­gal, cor­po­rate, tax and Gov­ern­ment in­dus­tries. The main part of its busi­ness re­mains con­tent pro­vi­sion. Lex­isNexis is also South Africa’s largest pub­lisher of law, tax and ac­count­ing uni­ver­sity text­books. Last joined the group in 1988 and was ap­pointed CEO in 1994. “But­ter­worths Pub­lish­ers came out to SA from Bri­tain in 1934. It prob­a­bly es­tab­lished its head of­fice in Dur­ban be­cause it was largely an English-speak­ing city,” Last says.

Lex­isNexis is now 50% owned by JSE-listed Kag­iso Me­dia. Its other joint par­ent is the gi­ant Reed El­se­vier group, with its divi­sional Lex­isNexis Group head of­fice in New York but with offices in more than 100 coun­tries world­wide. Reed Else- vier owns Lex­isNexis over­seas, hence the name change and rebranding of the busi­ness in SA.

“The busi­ness here was a lit­tle dif­fer­ent to But­ter­worths in Bri­tain. The le­gal mar­ket isn’t that big here – about 21 000 lawyers and 1 600 ad­vo­cates. So we had to be a lit­tle broader, which is why we ex­panded into the cor­po­rate, gov­ern­ment and aca­demic uni­ver­sity text­book mar­ket.”

But Last says changes to tech­nol­ogy – lead­ing to band­width be­com­ing more af­ford­able in SA and im­proved In­ter­net con­nec­tiv­ity – brought new needs and de­mands from clients, lead­ing to a grow­ing mi­gra­tion to on­line ser­vices.

“In SA we first went from print to a CDRom for­mat. Now we have fully mi­grated to on­line,” Last says.

That means, for a client such as a le­gal firm, the ini­tial cost of ac­cess to in­for­ma­tion has been re­duced. How­ever, they need an an­nual sub­scrip­tion, so there’s an on­go­ing cost. “Our on­line busi­ness is sub­scrip­tion based – it’s like an­nu­ity in­come.” Last says In­ter­net ad­ver­tis­ing is be­ing ex­plored but the group isn’t at all de­pen­dent on ad­ver­tis­ing.

It also means the move to pro­vide its con­tent on­line hasn’t af­fected Lex­isNexis fi­nan­cially, with its lat­est rev­enue and op­er­at­ing profit up by 22% for the year. “Al­though the In­ter­net has re­sulted in a de­crease in the cost of in­for­ma­tion, we’re pro­vid­ing much more in­for­ma­tion in for­mats that are more spe­cific to what in­for­ma­tion is needed and, for that rea­son, re­sult­ing in an over­all in­crease in rev­enue,” Last says.

That’s where Lex­isNexis re­ceived a lot of help from The Lex­isNexis Group. “For ex­am­ple, the US busi­ness has had to adapt to the global trend of pro­vid­ing in­for­ma­tion in on­line for­mats in a big­ger way and sooner than in SA. So we’ve ben­e­fited enor­mously from global learn­ing in that area.”

But then the group went a step fur­ther to trans­form it­self to what Last calls “a to­tal in­no­va­tion and so­lu­tions provider that ad­vises on how the in­for­ma­tion so­lu­tions pro­vided by Lex­isNexis can be used to im­prove the core op­er­a­tion of our clients”.

That’s chan­nelled through three op­er­a­tions: re­search so­lu­tions, risk man­age­ment and com­pli­ance and train­ing.

Reed El­se­vier is also us­ing Lex­isNexis in SA to spear­head the Lex­isNexis Group’s ex­pan­sion into Africa. The group is al­ready in Ghana, Kenya, Nige­ria and Mau­ri­tius, pub­lish­ing their laws and law re­ports.

Last says the cur­rent strat­egy is to gen­er­ate fur­ther growth through green­fields ini­tia­tives and ac­qui­si­tions, in SA and through­out Africa.

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