Research as a service (RaaS) can be delivered on a full-time equivalent (FTE), managed services or pay-per-use model, depending on a research client's needs for scalability and persistency and the research demands of its business.

1. Research as a Service:
Ripe and Ready for Prime Time
Research consumed as a service will be the new
digital-era application-programming interface that can
help companies connect better with their customers.
• Cognizant Reports
cognizant reports | june 2014

2. 2
Executive Summary
In an increasingly volatile and information-
efficient world, it is imperative for companies to
analyze and understand events that shape their
businesses on a real-time basis. Suffice it to say,
companies across industries today consume a
range of research inputs — financial, market,
industry and economic — to understand issues
and support executive decisions.
Empirical evidence suggests that the research-
service buyers have cleaved the market into
a wholesale market of “well-heeled and well-
served” buyers that typically comprise large buy-
and-sell-side financial services firms and a highly
fragmented set of “well-heeled, but underserved”
buyers such as boutique private equity (PE)
firms, venture capital (VC) firms, hedge funds and
various corporate functions within companies.
While the demand for research services is
ubiquitous, the varying character and composi-
tion of research requirements illuminate unevenly
distributed patterns of demand and consumption.
Further analysis reveals a compelling business
case to offer and consume research as a service.
By research as a service (RaaS), we mean the
ability to:
• Deliver research services through a range of
models — from traditional full-time-equivalent-
(FTE)-based to “pay per use.”
• Marry traditional and emerging IT services and
standard research capabilities to offer scalable
and cost-efficient solutions.
The urgency for such services is palpable. Already,
a combination of forces — regulations, crimped
profitability and technology evolution — is forcing
traditional wholesale buyers of research services
to look beyond established conventions to
minimize and variabilize cost. At the same time,
the large body of underserved and highly frag-
mented research service buyers offer an opportu-
nity for service providers to architect high-quality,
relevant and timely research services in variable
pricing models. Organizations can use the RaaS
primary value propositions — scalability, flexibil-
ity and cost-effectiveness — to negate volatility in
market conditions and business performance.
Forces Affecting Research-Centric
Businesses
Research-centric businesses such as investment
banking and publishing organizations are heading
toward less profitable growth1
and tough business
conditions (see Figure 1). The confluence of
tight regulations, heightened competition and
lack of the organizational wherewithal to utilize
technology to improve the quality of research is
undercutting profitability and return on equity.
In our view, the time is ripe for organizations
to consider the potential of the RaaS model to
improve profitability and time-to-market and to
acquire an edge over the competition.
Research Demand: Ubiquitous, Diverse
and Unevenly Distributed
The demand for research services is nearly
similar across many industries. What varies is the
character and composition of research needs;
cognizant reports
Shrinking Margins
ROE for Investment Banks
ROEPercent
ROEPercent
ROE for Publishing and Information Services Companies
20
15
10
5
0
-5
2010 2011 2012 2013
60
50
40
30
20
10
0
-10
2010 2011 2012 2013
JP Morgan
Barclays
Morgan Stanley
Goldman Sachs
Deutsche Bank
Citigroup
UBS
Credit Suisse
Bank of America
Thomson Reuters
Wolters Kluwer
Informa
Euromoney Instiutional Investor
Source: Cognizant Research Center
Figure 1

3. 3cognizant reports
both demand and consumption are unevenly dis-
tributed. Based on these criteria, the market for
traditional research services can be categorized
into two broad segments:
• The well-heeled and well-served segment
comprising large buy-side and sell-side firms,
as well as investment banks.
• The well-heeled but underserved segment
comprising private equity firms, hedge funds,
venture capital firms and corporate functions
such as marketing, sales, HR and IT of
companies across industries.
These segments can be understood better by
looking at the nature of their research require-
ments and how well they are currently served (see
Figure 2). The first segment largely deals with
capital markets research, which is more complex
in nature and requires high-end research capa-
bilities. This segment is relatively well-served by
research service vendors. Publishing companies
and information aggregators — with most of their
research requirements being less complex than
the needs of capital markets firms — are also well-
served by vendors.
The second segment consists of boutique firms
such as PE organizations, hedge funds and
venture capitalists whose research requirements
are extremely complex. This segment is relatively
underserved by vendors. Corporate functions,
which include sales, IT, HR and marketing divisions,
have relatively lower complexity of research
requirements and are not well-served by vendors.
Research Supply: Ready to Address
Unevenly Distributed Demand
The quantum nature of research consumption
is an important factor in identifying a suitable
service model (see Figure 3, next page).
FTE staffing model: Large capital market firms
are scale players with varying volumes of research
requirements. They plan research calendars,
timetables and well-defined areas to be covered.
The traditional FTE model with full-time research
analysts suits these organizations, as they have a
fixed demand stream of complex and high-volume
research needs.
Managed service model: Publishing organiza-
tions and information aggregators also have
a planned timetable for defined products with
fixed volumes. A managed-service, volume-based
model suits these organizations best.
Pay-per-use model: Notwithstanding their
planned coverage areas, boutique firms have
research needs that are highly specialized and
lack scale. Corporate functions are also lacking in
scale of research volumes and have unevenly dis-
tributed demand patterns that require on-demand
research support to fit tight deadlines. Lacking
Swelling Complexity in Research Demands
Low Medium High
Low
Medium
High
Complexity of Research Needs
SourcingMaturity
Research Services Market
Comprises two broad segments: Well-heeled and
well-served and well-heeled and underserved.
Large Capital Market Firms
Investment Banks, Large
Buy-Side and Sell-Side Firms.
Publishing and
Information
Aggregators
Corporate Functions
(Marketing, Sales, IT and HR)
Boutique Firms
(PE, Hedge Funds, VC)
Source: Cognizant Research Center
Figure 2

4. scale and with highly ad hoc research require-
ments, a pay-per-use model that charges for each
research request suits boutiques and corporate
functions.
The RaaS Core Value Proposition
The gold standard for RaaS is the minimum
amount of services delivered through pay-per-
use and managed services models. Figure 4
(next page) illustrates how a bouquet of sell-side
research services over time can be simplified and
standardized and delivered flexibly and cost-effi-
ciently through a range of operating models.
Research service buyers can optimize their
research costs and convert them from a fixed-cost
structure to a variable-cost structure based on
their most pressing research needs.
• Given the fixed volume and periodic updates,
the managed services model is ideally suited
to basic maintenance work. This include basic
tasks such as news tracking and retrieval,
database maintenance, valuation updates
and ad hoc data gathering and basic analysis
such as political economic social technologi-
cal analysis (PESTLE), strengths, weaknesses,
opportunities and threats (SWOT) analysis,
creating company profiles, model updates and
updating historical data.
• Research buyers can opt for a pay-per-
use model for research requirements that
are specialized but are ad hoc in nature.
Research needs of corporate functions and
deliverables with medium complexity (econo-
metric modeling, earnings preview notes,
earnings review notes, financial projections,
new product designs) are well-served using this
model.
• The FTE-based model suits firms with
defined research products that are complex
in nature (i.e., company/country reports,
report writing/initiating coverage, trading
ideas, trader/client calls, etc.) and require sig-
nificant value-added and dedicated resources.
• Going a step ahead, firms with limited time
and resources to invest in new product
development can partner with mature
research providers who can coinvest with
them to conceptualize new product ideas to
create innovative products for customers and
generate incremental revenue.
Technology: The RaaS Differentiator
The distinct nature of research services, requiring
deep domain knowledge, is predicated on a wide
range of IT applications to underwrite the quality
and efficiency of analyst output. This intersec-
tion between the domain knowledge (human) and
technology application (IT) offers material oppor-
tunity for RaaS providers to optimize service effec-
tiveness and efficiency. When evolved best, RaaS
providers can provide an on-demand, transaction-
4cognizant reports
Catering to Jagged Demands
Low Medium High
Pay-Per-Use
Managed
Services
FTE
Large Capital Market Firms
Investment Banks, Large
Buy-Side and Sell-Side Firms.
Publishing and
Information
Aggregators
Corporate Functions
(Marketing, Sales, IT and HR)
Boutique Firms
(PE, Hedge Funds, VC)
Complexity of Research Needs
ResearchOperatingModels Pay per useu
Research Supply Side
Ready to Cater to Unevenly Distributed Demands.
Source: Cognizant Research Center
Figure 3

5. cognizant reports 5
al, utility-like service model by marrying research,
analytics, IT applications and an enabling infra-
structure that are owned by a service provider.
This arrangement transfers the risks and costs
associated with ownership from the consumer to
the provider of research (see Figure 5, next page).
Figure 5 illustrates how research service providers
can, over time, unbundle IT service components
underpinning the core research services and
deliver them as a service. However, to provide
RaaS, research vendors need to have strong IT,
business process capabilities, access to skilled
talent and the scale to accommodate fluctuations
in demand for research services.
Research as a Service: Success
Prerequisites
Leading RaaS providers will need to exhibit the
following attributes:
• Willingness to experiment: The RaaS model
requires a mature relationship between pro-
vider and client that affords each partner the
freedom and space to pilot variations on the
RaaS theme. The provider and client need to
be on a strong footing in terms of their under-
standing about how the RaaS model works. It
works smoothly only when requirements from
each are crystal-clear. Also, both sides must
have a strong and established relationship
with high levels of confidence, credibility and
mutual respect for each other’s capabilities.
Efficient Operating Models Addressing the Research
Service Needs of a Sell-Side Firm
Low Medium High
Complexity of Research Needs
ResearchOperatingModels
Pay pery
h
se
chch
Research Supply Side
Ready to Cater to Unevenly Distributed Demands
FTE
 Shadow coverage.
 Risk analysis.
Level 6
New Product Development
 Trading ideas.
 Trader/client calls.
 Shadow coverage.
Level 5
Complex Work
Level 4
Significant Value-Add
 Company/country reports.
 DCF/LBO valuation.
 Report writing/
initiating coverage.
 Calls with company
management.
 News tracking
& retrieval.
 Database maintenance.
 Valuation updates.
 Ad hoc data gathering.
Pay-
Per-Use
Managed
Services
 Econometric modeling.
 Earnings preview notes.
 Earnings review notes.
 Financial projections.
 Design new products.
Level 3
Valuation/Co. Briefs
Level 1
Basic Maintenance
 Pestle/SWOT analyses.
 Company profiles.
 First reads.
 Model updates.
 Update historical data.
Level 2
Basic Analysis
Ca s co pa yCDesign new products.
Source: Cognizant Research Center
Figure 4

6. cognizant reports 6
Source: Cognizant Research Center
Figure 5
Offering Research Underpinned by Human and IT Elements as a Service
Pay per useu
Managed
Services
“As a Service”
Build Buy Rent
FTE
Fixed Cost
Variable Cost
IT –> Application + Infrastructure
ResearchServiceOperatingModels
Pay
Per Use
• Ability to operate at scale: While core re-
search capabilities are a necessary condition
for vendors to offer the RaaS model, having
sufficient headroom to grow and expand capa-
bility is essential. Scale allows service provid-
ers to handle volatilities arising out of varying
demand patterns from research service buy-
ers. Scale permits vendors to optimize invest-
ments in technology, talent and infrastructure,
not to mention providing a buffer to withstand
demand volatility.
For consumers of research services, the following
is essential:
• A virtual mindset: The customer must be
comfortable taking a hands-off approach to
ownership of people, processes and technology,
leaving these elements to a trusted provider.
An ideal way to start testing the RaaS model
is on a pilot basis in areas where the consumer
of research services has sufficient confidence
in the capabilities of the provider and trust in
its ability to meet business needs today and
tomorrow and to meet or exceed expectations.
As the risk in this model is borne mostly by the
provider, organizations that consume research
services should carefully evaluate service
provider capabilities to deploy the RaaS model.
The Road Ahead
The varying research needs and maturity levels
of buyers require service providers to target
and offer customized services accordingly. The
treasure trove of data generated by social media
and connected devices is creating a big data
challenge for B2B and B2C companies that want
to better understand their customers. They do
not have the technological wherewithal, skills and
talent to do this, thus forcing them to look outside
for assistance, a lament increasingly heard by
industry insiders.
Organizations can procure such services from
mature service providers that have developed
strong capabilities in utilizing both structured
and unstructured data to offer custom research
insights to complement more mainstream
structured data analysis (see Figure 7 on Page 8).
Organizations planning to use the RaaS model
need to ensure that their vendors have proven

7. Web Scraping,
Big Data Tools, Content
Acquisition, Database
Management
Architecture Design and Systems Integrations, Feedback Integration
Analytics
Layer
Research
Lifecycle
Technology
Layer
Creative
Services/User
Interface
Primary Research,
Survey, Social Media,
Product Analytics
Differentiated
Research – Value
Add with Statistical
Analysis, Social Media
Targeted
Distribution
Client Analytics, Campaign
Analytics, Client Servicing
Strategies, Web Analytics,
Pricing Analytics
Research Idea
Generation & Data
Management
Research Report
Generation
Publishing &
Distribution
Research
Marketing
Automation
Tools, Authoring
Platform
Publishing
Platform
Client Portal/User
Interface CRM
Database Search
GUIs, Content
Acquisition Filters
Content
Visualization,
Interactive
Reports/Models
Enhanced User
Interface, HTML5,
Enhanced Mobility,
Mail Management
Audio/Video
Summary, 1-Pager
Flyers
7cognizant reports
Research operations of service providers continu-
ously matured by embracing increasingly sophis-
ticated technology and their own homegrown
ability to marry technology with research. Many
are deploying homegrown, proprietary processes
that employ technologies to automate, reduce
errors and increase efficiency and quality of
research operations. They are utilizing tools such
as Web crawlers, workflow management systems,
mobile apps and knowledge management
platforms to increase their operational efficiency
(see Figure 6).
How Research Service Providers Use Technology
How Technology Can Improve the Effectiveness and
Efficiency of the Research Value Chain
Source: Cognizant Research Center
Figure 6

8. cognizant reports 8
capabilities in understanding and integrat-
ing business and technology, offer high-quality
research services and have superior market cred-
ibility relative to service delivery. This is critical
to ensure the requisite operational efficiencies as
well as to amplify key business benefits.
The growing sophistication of service providers
to offer both technology and research solutions
is creating a unique sweet spot that reimagines
traditional research service models and serves
ever-expanding market needs.
Bill’s Activities
Insights Generated
Outcome/Ideas Delivered
Tweets on new technology
advancements in shale oil
industry.
Tracks news on Putin:
Russia has right to use force
in Ukraine – oil prices slip as
Ukraine crises cause jitters.
Reads a research
paper on latest shale
oil extraction.
Follows latest news related
to oil stocks in the portfolio
and their earning releases
schedules.
Searches for and buys books,
watches videos/documentaries
to understand new develop-
ments in the shale oil industry.
 Stock prices for BP and Marathon Oil are expected to fall exposing
William to a higher risk.
 From his trading patterns and portfolio composition, he is long on BP and
Marathon Oil and he needs to diversify into shale oil related stocks.
 Weekly updates on the Ukraine crisis and related analytics on oil price
fluctuations.
 Trader goes short on BP and Marathon Oil.
 Diversify portfolio and invest in shale oil companies like
Tesoro and Holly Frontier.
Source: Cognizant Research Center
Figure 7
Providing Rich Insights Using Structured and Unstructured Data
to Help Professionals Make Smart Decisions
CODE HALO
Consider the case of Bill Thomson, a 32-year-old professional working as a trader at a large financial institution and
tracking the oil and gas sector. Bill’s activities – such as his Tweets, the news he follows, topics of his interest, the
books he buys, videos and documentaries he watches related to the oil and gas sector – are tracked. Customized
and timely insights, utilizing the structured and unstructured data gathered from the tracked sources, can then be
generated and delivered – which he can use to make smart decisions.
Footnote
1
Average trading volume on Wall Street is declining, and touched the lowest point in the last five years with
less than 3 billion shares traded in August 2013. RoE for investment banks has declined by roughly 50%
in the last two years in both Europe and the U.S. Similarly, the publishing and printing industry recorded a
below average RoE of 4.39% in the past year.

9. About Cognizant
Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out-
sourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered in
Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry
and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 75
development and delivery centers worldwide and approximately 178,600 employees as of March 31, 2014, Cognizant
is a member of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among
the top performing and fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on
Twitter: Cognizant.
World Headquarters
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Teaneck, NJ 07666 USA
Phone: +1 201 801 0233
Fax: +1 201 801 0243
Toll Free: +1 888 937 3277
Email: inquiry@cognizant.com
European Headquarters
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Phone: +44 (0) 20 7297 7600
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Email: infouk@cognizant.com
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Chennai, 600 096 India
Phone: +91 (0) 44 4209 6000
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Email: inquiryindia@cognizant.com
­­© Copyright 2014, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any
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Credits
Author
Anand Chandramouli, Director, Cognizant Research Center, Cognizant Technology Solutions
Analyst
Aala Santhosh Reddy, Analyst, Cognizant Research Center
SME
Feroz Kudrolli, Head of Research Operations, Business Process Services
Design
Diana Fitter