ihs

Businessmodel of IHS

Customer Segments

IHS has a niche market business model, with a specialized customer segment. The company targets its offerings at companies in capital-intensive industries, including aerospace/defense, chemical, automotive, energy, maritime & technology, and healthcare. Its biggest 1,000 customers are responsible for approximately two-thirds of its revenue, though no one client accounts for over 10%.

Value Proposition

IHS offers three primary value propositions: accessibility, performance, and brand/status.

The company creates accessibility through its wide variety of product offerings. It has a vast selection of proprietary market data, analyses, and forecasts. The analyses include reports on thousands of technologies in 12 interconnected markets.

The company has demonstrated strong performance. In 2016 it released a report that included the results of a survey of its customers. The publication included the following data:

  • 73% of IHS customers give the company’s products an overall rating of “very good or excellent”. This figure has increased significantly from just 49% in 2010.
  • 77% of customers give the company’s information and analytics quality a rating of “very good to excellent”.
  • Nine out of ten customer service e-mails and phone calls are responded to within 24 hours, 77% are resolved with one company interaction, and 90% of all problems are resolved to clients’ satisfaction. The company has established a strong brand as a result of its performance. It offers its services to organizations of all sizes in over 180 countries. Its client base includes 72% of the Fortune Global 1000 and 77% of the Fortune Global 500. It employs almost 9,000 workers in 33 countries worldwide.

Channels

IHS’s main channel is its direct sales force, spread throughout the world. The company promotes its offerings through its website, social media pages, attendance of conferences, and the hosting of seminars, workshops, and briefings.

Customer Relationships

IHS’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the website while having limited interaction with employees. That said, there is a personal assistance component in the form of phone support.

Key Activities

IHS’s business model entails writing and distributing its information and analyses to customers.

Key Partners

IHS maintains partnerships with other research and data providers so that it can provide its customers with access to additional information. Specific partners include the following:

  • British Standards Institution (BSI)
  • BSRIA Limited
  • The Chartered Institute of Environmental Health
  • The Chartered Institute of Building
  • Construction Industry Research and Information Association (CIRIA)
  • CityTwist Conquest Automotive
  • The Concrete Society
  • FastrackCAD
  • The Fire Protection Association
  • The Institution of Structural Engineers (IStructE)
  • Network Rail
  • Perry Scott Nash Associates
  • The Royal Institute of the Architects of Ireland
  • The Royal Incorporation of Architects in Scotland
  • Steel Construction Institute
  • Sheila Pantry Associates
  • Timber Research and Development Association
  • The Trading Standards Institute
  • Transport Research Laboratory ### Key Resources

IHS’s main resources are its human resources. They include 5,000 information and industry researchers, subject matter experts, analysts, and software developers. This group includes 650 data transformation experts and technology analysts.

Cost Structure

IHS has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of revenue, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.

Revenue Streams

IHS has two revenue streams:

Subscription Revenues – Revenues generated from subscription fees charged for access to the company’s information product offerings and software maintenance. They accounted for 81% of total revenues in 2015.

Non-Subscription Revenues – Revenues generated from services, consulting (research/analysis, forecasting, modeling, etc.), software license sales and associated services, single-document product sales, advertising, and conferences/events.

Written on October 25, 2017