Turning Back the Clock — When Analysts Get it Wrong

A few weeks back, David Bush penned an excellent little number over on E-Sourcing Forum highlighting how industry analysts can get vendor predictions wrong -- sometimes very wrong. The subject of David’s analysis was a 2002 report from Forrester Research titled Stand Alone Sourcing Apps Vanish. According to Forrester's predictions at the time, stand alone sourcing vendors would fade by 2003 as users flocked to integrated sourcing applications from ERP, SCM and product-design vendors. Ha! Now that didn't exactly happen, did it? Emptoris and Iasta are flourishing, among others. CombineNet has carved out an excellent niche for itself. And others, such as BravoSolution (which recently acquired Verticalnet) are aggressively getting back into the fight. But it's 2008? Shouldn't they have died by now if we were to have believed Forrester's prediction?

David's advice is spot in. Some industry analysts look at their industry "in a vacuum, without out giving the vendors any credit for survival instincts, business sense or pride in their businesses ... Moral of the story -- read these reports as a single data point. They are not written by Warren Buffet and many are done without research to fully back the findings." Amen, David. Many industry analysts are not just human -- they're not deep in the sector they cover. Fortunately, there are exceptions to this. I give both Mickey North Rizza and Debbie Wilson -- despite her recent crazy quadrant blunder -- credit for knowing their subject matter. But many others in the sector treat Spend Management as a hobby. For this reason, we should treat their vendor analyses and prognostications with more than a grain of salt.

- Jason Busch

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