If you're in the restaurant business in a major city -- or you've gotten on the wrong side of Jesse Jackson -- you probably already know what a shakedown feels like. For those who have never experienced it, the way it works is pretty simple. To wit, a third-party entity such as a garbage collection firm politely (or impolitely) suggests that it would be worth hiring them to gain their favor or to avoid negative consequences (these two "benefits" are sometimes intertwined). Unfortunately, the industry analyst world has stooped to this level as well recently. Although they've not quite yet asked for "protection dollars", they're getting close. Let me share two examples without naming names.
One provider that I know was recently examining working with an industry analyst firm that suggested to them that "one of the most important parts of your relationship with XXX is ensuring that our team is always up to date with current events, initiatives and goals at (insert vendor name here). We want to understand your messaging, position and target markets completely so that we can accurately represent you to the end-user community." Note, I added the bold. But I wanted to call attention to it for a reason. Shouldn't it be the job of an analyst firm with end-user clients to be aware of -- and best represent -- the top set of vendors regardless of whether or not they are clients? In my world, it absolutely should be.
In another more egregious case I heard about recently, an analyst firm had issued an award to a number of vendors in a sector, and many, if not all, were not yet clients of the firm. This award has been commented on by Spend Matters readers, in fact. But in the months following this award, the firm in question put on the full court press to sign up at least one of the vendors with various innuendoes and suggestions that it would be in their best interest. I won't get into the details, but the tactics would have been better suited to those of Jesse Jackson than that of a professional advisory organization.
What's worse than a direct financial shakedown when it comes to potentially misleading practitioners? When an analyst firm publishes a competitive ranking report relying primarily on the knowledge of their vendor clients to inform their questions/ranking criteria because they're not versed in it themselves is perhaps even more egregious than the previous transgressions. Has this happened? I think it has, based on some evidence I've gotten from vendors (in fact, some of those were providing the information to this said analyst firm). In my view, this type of behavior speaks to why the old industry analyst models must change. Analysts have an important place in the Spend Management world, but not at the expense of objectivity, expertise and an overall commitment to doing what is right for their end-user clients.
In contrast, I know that both Michael Lamoureux (The Doctor) and I are committed to meeting with and listening to vendors regardless of whether or not they'll ever be a client -- especially if they're willing to give us the right level of access and information to really look under the covers. We might be shy with our advice to them if we're not working with someone as a client, but we'll never skimp on doing research to portray someone in an accurate light (even if that means meeting with or talking with a non-client on a quarterly briefing basis). I would hope that the industry analyst world follows this model in the future, ridding themselves of the shakedown mentality once and for all. I would also encourage them to come clean with full vendor client disclosures -- just as Michael and I do -- on their sites and in their interactions with end-user clients.
- Jason Busch