Thursday, August 9, 2007

Companies get smarter...what's the future role of analysts?

Ray Wang and I have talked about this a few times, and I think it is an interesting trend for analysts and vendors to think about, so thought I'd write a short entry here.

I've noticed a new trend over the last year as I work with SSPA members on technology acquisition issues: some of these companies are hella smart! One company asked for input selecting a Web self-service platform. I went to the meeting, and attending were internal experts on support technology. Specifically around natural language searching, one of the most innovative areas of self-service, they had a guy who had tested every system out there, and with his engineering background, he had an in-depth understanding of how each worked and what their strengths/weaknesses were. And the key here: he wasn't from IT. He was part of the support organization.

Another company is evaluating vendors for a cross-enterprise Web collaboration platform. They had a team dedicated to this topic, and had incredible knowledge about the vendors and their technology. And had contacted references listed on the vendor websites for information!

As an aside--I survey members to find out what technology they use and how satisfied they are with it. Many members have asked that I publish this in the member directory so they can easily contact other members to ask about their experiences with a software program. Damn, with the incredibly low satisfaction scores on most of the surveys, can you imagine how those reference calls will go?

In both cases (and there are many other examples), these internal employees know more than about 90% of the analysts covering this space. There is far too much "rah rah" coverage on cool features and the latest press releases, and not enough coverage on what actually works and how to get the most value from your purchase. (And yes, from that last line, it is clear I was a Giga analyst!)

Our SSPA Benchmark data clearly documents the rise of technical complexity, and I think larger companies are now identifying which technologies are the most critical to their success, and business units--not IT--are recruiting experts on those topics.

My take away from this:
Research firms need to stop focusing on 10 year projections and creating trends in marketing-speak and focus instead on value. If not, you won't be relevant much longer.

For vendors, I think you need to realize that future prospects may be much better informed about your technology than many of your sales people. Marketing needs to focus less on mushy things like "improving the customer experience," and more on hard-core ROI statistics (which even wildly successful companies still struggle to give me).

And bottom line, any vendor or analyst firm with obvious contempt, or at least condescension, toward customers will soon find that the customer has gone away.

And that's my view from the front lines of the front office!


BFrench said...

With the anecdote, are you saying that industry analyst content and news coverage had no significant role in the organization's product selection or feature prioritization process?

John Ragsdale said...

In some of these situations, the anlalyst's only involvement is a final sanity check before the team executes on its plan. And when the team's recommendations, based on indepth experience and research, are always validated by the analysts, I doubt senior management will continue paying for that "rubber stamp" for much longer.

BFrench said...

Interesting. Thanks.

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Tani said...

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