Thomson Reuters has hit operational efficiency savings of $1.2 billion (£794 million) from the 2008 merger that formed the group, as it makes aggressive efficiency changes in the midst of a spate of major product launches.
The SAP-based business data firm told financial markets that integration work and new launches, where single platforms are replacing multiple legacy systems, are “delivering results”. It is targeting $1.6 billion total savings by 2011.
Among the savings, some $125 million in the three months to 31 March was attributable to content consolidation and organisational realignment in the company’s market data division, as well as integration work in the professional services division. Integration costs totalled $97 million.
But job losses have also played a part in the cost cutting, with around 650 technology, content and back office operations jobs being lost in the last year. Thomson Reuters also established an offshore location in India to handle some of the company’s finance functions.
Among new products, a revamp of the company’s online legal information service, called WestlawNext, receives over a million searches a day and was off to a “strong start” with over 2,300 accounts, according to chief executive Tom Glocer. The service, which uses advanced algorithms to improve legal research, was relaunched only three months ago, having been built by over a thousand Thomson Reuters technology, legal and information specialists.
Last month, the company also launched Elektron, a new high speed data distribution network aimed at providing real time market information to hedge funds, asset managers, banks and anyone else requiring high-speed trades. The “open and neutral” network is up to 20 times faster than traditional aggregated data networks, the company said at the launch.
Thomson Reuters now faces a crucial nine months as it launches two new technology-based products aimed at becoming major money makers for the firm.
Eikon, a global desktop product for access to its markets data, will launch in the second half of the year, after over a billion dollars' worth of development under ‘Project Utah’. The product took two years to build, and aims to create a single platform to support around two hundred Thomson Reuters financial products.
The product is expected to receive a high profile launch. In a demonstration to investors last year, Thomson Reuters said the system would be "easy to support and maintain", running on an "open, flexible platform" with easy customisation.
The company will also launch OneSource, a web-based tax dashboard, which aims to make it easier for businesses to process multiple tax types internationally. It replaces the OneSource Tax and Planitax systems, and aims to help businesses control daily financial processes and workflows.
As Thomson Reuters reported operating profits for the three months to 31 March were down 15 per cent year-on-year to $321 million, Glocer said the new offerings “equip our sales forces with new flagship offerings to sell into a rising economy”.
The company is also building an in-house back office sales system, under a project called GCAP, to handle its entire selling process from sales pitches through to order processing and system provision. This stems from a project that began in Reuters before the merger.