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I was surprised to read from the www.mrweb.com daily newsfeed that Digitab, the Kantar-owned DP house based in London, is being wound down over 2018. In many ways, I am not surprised as MRDC, amongst other agencies that offered data processing (DP) services in the 1990s, have needed to change significantly in the last 25 years. In the 1990s, it seemed that most of the quality DP work was carried out in the more advanced economies, but that has changed. I would argue that many countries in Asia and Eastern Europe countries have some of the most talented people in DP and IT in the world right now.
Although I might have considered Digitab as a rival in the 1990s, I had a deep admiration for their quality and the man who led the company at that time, Eric Willson. Indeed, the connection is even stronger as I was a part owner of a company called The Tab Shop which sold part of its operation to Digitab/Taylor Nelson in 1989. MRDC and Digitab have, to the best of my knowledge, offered similar services - higher end tabulations, automated reporting, programming and other DP services.
There has been a steady decline in the number and size of DP agencies in the market research sector in the UK. The two main reasons for the decline have been the growth of outsource companies in India, China, Eastern Europe and anywhere else with lower labour costs. This trend started in the 1990s and has continued. Additionally, there are fewer paper questionnaire surveys as market research has moved online, which means that data can be sent around the world with greater ease for processing.
MRDC was set up in 1992 and one of the first things that we decided was that we would only handle complex DP projects. In 1992, the price of PCs was making it inexpensive for others to compete and outsourcing to India was beginning. We decided not to compete in the low-end DP market as it became clear that profits would gradually dwindle if we stayed in the ‘easy, fast turn round’ DP market.
MRDC and Digitab followed a similar course in the 1990s handling some of the more complex DP projects and specialising in automated reporting. Digitab had other services such as its expertise in statistics, but MRDC and Digitab seemed, to me at least, different from other DP agencies in the UK.
Around the end of the 1990s and over the Millennium, I felt that MRDC and Digitab drifted apart. MRDC moved into running its own offshore DP operation but continued to manage DP projects in the UK with much of the actual work carried out in Asia. MRDC also moved its focus to selling software, a decision that has put the company in a far strong position over the last 20 years.
MRDC continues to handle some DP work. It still focuses on more complex projects – tracking studies, multi-country studies, pharmaceutical survey analysis or just complex requirements. Automation of tables and reports has become a growing part of our business. We continue to manage projects in the UK with a team in The Philippines doing most of the work. This set up successfully makes us competitive but at the same time it preserves good customer service and easy contact to deal with practical issues that arise in tabulation or automated reporting projects.
Digitab was part of Taylor Nelson/Kantar and maybe this held it back in some ways. Branching out into new business areas becomes more difficult for a company that is part of a big group. I can recall a similar problem when I worked for a DP agency that was owned by Guinness back in the 1980s. Change was impossible even to my youthful eye.
It may not herald the death of DP agencies in the UK, but the remaining companies will only survive if they can offer something special. That is most likely to be built around some special expertise and/or some outsourcing function. DP agencies have historically tended to be profitable by working hard; that becomes a flawed model when talented teams can operate successfully in low cost economies.
For the foreseeable future, we will continue to run a DP operation in the UK which focuses on skilled DP which is managed in the UK but handled by a team in the Philippines. It works well and ensures that we are competitive. In my view, more DP agencies will disappear over the coming years from the UK. They will not be replaced by new, young DP agencies except where they have some specialist skill which offers something different.
So, farewell Digitab. I think it is a company that has contributed more to DP in the UK than any other agency. It’s sad that it has closed. Rivals in the 1990s, yes, but as I have aged I really have worried less and less about rivals. I think Digitab will be missed from the market research landscape.