Do We Really Need Analyst 2.0?

On Friday, guest blogger Eric Strovink penned a thought provoking post suggesting the elevation of a subset of enterprise bloggers and the creation of a whole new category of industry analyst, unaffiliated with the larger, traditional firm. I think Eric hit the proverbial nail on the head from a timing perspective, introducing this topic at the start of 2008 as practitioners and vendors think about how best to allocate their time and research budgets with the major firms -- not to mention the broader philosophical question about what place old-school and newer analyst and research models will have going forward in the Spend Management world and beyond.

I think it would be valuable to start this continued examination by asking the question: do we really need Analyst 2.0? In short, my answer would have been different a couple of years back. In 2004, I would have said absolutely. Sector coverage from all of the major firms had died off. Spend Management was an afterthought, relegated to a dirty cubicle covered by has-been analysts more content with looking at legacy mainframe application maintenance software than global sourcing and contract management (I exaggerate, but hopefully you get the point). More recently, however, there has been a new crop of analysts such as Mickey North Rizza from AMR and Debbie Wilson from Gartner who are quietly building names for themselves in the sector, producing excellent work. Even Aberdeen, which I do not consider an analyst firm, has a number of individuals such as Andrew Bartolini, who are capable of serving in a high-powered analyst capacity should they choose. All bring domain expertise and a set of analytical skills to the table and are more than capable of offering qualified opinions on a broad part of the Spend Management market.

So in short, do we do not need Analyst 2.0 to replace Analyst 1.0 from a traditional coverage perspective? Not in my view, except for those -- such as companies in the middle market -- who cannot afford to pay for traditional analyst research. However, there is still a huge void in coverage that the industry analysts have rarely -- if ever -- focused on that could have a major impact on potential consumers of Spend Management technology and services, influencing decisions based on what might be a better set of criteria -- looking at a broader section of the market -- than what traditional analysts use and consider in their research. Consider how analysts often fail to look at smaller, innovative providers in the market on a regular basis.

As Eric suggested in his post, most firms give smaller vendors the short straw when it comes discussing their capabilities. After all, smaller providers pay less -- if anything -- to get material face time to influence firm research. And individual analysts are often so tainted in their approach to the market from the old ERP, large-vendor model (whose dollars largely subsidize their work) that few really can offer analysis that takes into account true innovation and newer types of business models (e.g., SaaS solutions that combine content and process) on a regular basis.

In addition, perhaps the larger flaw in traditional analyst vendor evaluation models is their "clean-room" approach to looking at solutions. Asking vendors to follow a demo-script or to check the box on features or functions is about as useful in the real world as using a Ferrari to car-pool kids back and forth to school. Perhaps a better model, as Eric once suggested to me, would be to actual tear apart technology by using it, trying it out more like a true test drive, interjecting opinion into how it performs in the real world based on experience as practitioners and experts. I have some other ideas as well on improving the Analyst 1.0 model, but I'll save them for Spend Matters readers to look at as we begin to deploy them this year on these virtual pages. But please, regardless of the direction that I take Spend Matters in, call me a blogger, not an analyst. Not even one of the 2.0 variety. I'll leave that moniker to my friends in Boston who evolve their business models.

- Jason Busch

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