Defining an analyst

20Aug09

There are several arguments that you can be sure will continue as there are too many views as to what is correct. Even though my personal favourite is who would win in a fight between Spiderman and Batman, the more pertinent one in my focus area is defining “who is an analyst?”

Normally I try not to get to emotional about it, but after reading Vinnie’s post where he quotes:

seems like AR folks want to cling to a narrow (and shrinking) definition of market influencers.

…I have to say that my cage well and truly got rattled.

Vinnie’s view is that analysts are becoming less influential in a world where multiple people can provide equivalent or better value. He states in a tweet:

"analysts" are just a small subset of a "1000 points of influence

Even though I agree with some of his points, I think that Vinnie has missed the big picture.

Like Vinnie, I see that many people influence decision making. I believe that we have moved from a top down version of decision making to that of a spherical one where public engagement is key. Decision makers have the luxury of being able easily seek advice from multiple parties when deciding what to do.

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However, how much weight does the individual put on the different audiences he can engage with. The answer to that lies with trust.

Trust.

Edelman has ran surveys every year defining who decision makers trust. The highest ranked people, and one that has remained top for some time is not the CEO, peers or journalists but analysts.

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Perhaps then, the highest definition of an analyst is someone who you can trust.

The characteristics of this trust were very clearly seen in the recent IIAR analyst of the year survey:

  • they are independent
    the understand the industry
    their advice is based upon primary or secondary research
    they are trusted with NDA information so they can make their decisions based upon sound knowledge.

Are they involved in every step in the decision-making process? Of course not, but the steps they do take part in are critical. Perhaps the key point that Vinnie needs to realise is that just because not every analyst has the ability and authority to help in procurement like he does, it does not mean that no analysts can. Ovum famously help the government save millions of dollars in IT spending – isn’t that influential?

The analyst role is changing though. The saturation of information and commentary available has ensured that firms have had to adopt different business models to survive. Some succeed well providing syndicated research, others specialise in a patronage approach, some focus on messaging and consulting.

It is true that not everyone who is an analyst, analyzes but they still fulfil a key role.

Is Ray Wang an analyst now that he has left Forrester, according to him:

yes. but not in syndicated research. more like a cross between the Ent Irregulars and some indep analysts

Other thoughts that have come in through Twitter defining who is an analyst:

analyst = ones who draws conclusions based on hard numbers/ratios/real comparisons (via Mauricio Samayoa)

Anyone that has insight and/or has impact on purchasing decisions (via Mark Duke)

one element : analysts are influencers with some proof points behind their opinions (or at least they should be) (via Sandy Bergman)

Analysts study the complexity of markets, their communities translating them into market models, opinions and advice (via Martin Hingley)

Seems to me that the hard and fast pigeonholes don’t work across the universe anymore. And really, why should they? We’re at point in time where lots of businesses and services are shifting from "mass" to custom, personalized, specific one offs.

What’s important is that every organization has clear and informed answers to the questions: who informs your decision makers? and who influences your decision makers? (via Barbara French)

What does this show us?

It certainly appears that even amongst analysts and AR Pros, that we cannot agree. However, I’d like to define an analyst based upon all the comments as:

An independent expert who is trusted to give impartial advice based upon their privileged information

Whether they can fulfil all the different roles in the cycle (such as procurement, messaging advice, market analysis, sales training etc) depends upon the calibre of that analyst and the type of firm they work for. There will always be individuals to fill the vacuum where analysts do not have the skills and in that space there will be a grey area.

Nevertheless, as long as this community is trusted by the decision makers, there will always be a role for analyst relations and true engagement.

What do you think?

 

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11 Responses to “Defining an analyst”

  1. Any analyst that tries to position themselves as the final arbiter deserves anything that happens to them. We are just one of many points in a decision making process – the person or persons making the decision will take information from where they can – the vendor, the vendors competitors, their peers, the web, analysts, journalists, whatever.

    The problem this brings is one of “too much information”. For anyone who has ever tried buying a big ticket persoanl item and searches the web, uses something like Which magazine, asks friends and so on, you find that the more you uncover, the less certain you become. More options become available, more problems are raised. At some point, you have to bite the bullet and make a decision. This may be based on a distinct punt on a gut feel backed up by the overall information found – or it is more likely to be based around an intelligent filter of “I trust them”, “That seems to make sense”, “That has an agenda behind it”, and “What a crock”.

    I woudl hope that when a person is part of a corporate decision making process, analysts fall in to the first 2 areas – if they are known to the person as part of a retainer or some project being carried out, then it should be a trust relationship. If unknown to them, then an analyst who is a true analyst shoudl be independent enough to have someting of interest to say – rather than just reporting.

    If the analyst falls in to the last two, then they are either an analyst for hire, regurgitating what thr vendor wants them to, or completely out of touch if they are in the last category. The analyst community is small enough that word spreads, and it shoudl be harder for those in these two categories to make a living.

    Finally, though, as previously, we are just one point in the total decision making process – and as such, we have to make ourselves as available and open as possible so that people can challenge us to stand by our views, explain them more fully and to put into context how any changes to the initial view are needed to meet the specific person’s problem.

  2. 2 gerryvz

    It’s an evergreen question. I was just having this conversation earlier in the week with a very long-time analyst …. about how the definition and experience of analysts has shifted over the past 20 years.

    I remember early in my career, when I first began dealing with analysts at the big firms (and back then, there were more big firms and far fewer smaller firms and independents). They were analysts in the mold of Gideon Gartner himself: Typically they “grew up” in the IT industry, having held roles for multiple decades as programmers, IT managers and CIOs. They knew the ins and outs of the big vendors, their product lines, the software, the ISVs, the vendors’ sales tactics, and how to negotiate deals. These analysts were veterans of many years’ worth of golf outings with their IBM sales reps and booze-fueled dinners and evenings out.

    But most of all, they had credibility borne of the time they spent in the IT trenches. They’d BEEN there … in the same position, asking the same questions, making the same decisions as their clients. They’d done it for decades before “changing industries” and joining the ranks of the Gartner, or META, or Yankee Groups.

    That generation of analysts is largely gone now. Many of today’s analysts are career analysts, having made the decision to be an analyst right out of university, or coming into the analyst role after having been a journalist for a few years and specializing in a particular area.

    The notable thing is that far fewer of today’s analysts have served time in the IT trenches. Far fewer of them have lived in the world of the raised floor or air conditioned room. Far fewer of them have twisted a hardware vendor’s arm for a bigger discount.

    I’m not saying this change is good or bad. However, it definitely does change the experience base and perspective with which analysts can draw the advice and conclusions from that they provide to customers.

    Cheers,
    Gerry

  3. “An independent expert who is trusted to give impartial advice based upon their privileged information”

    one problem with the definition. in an ideal world analysts wouldn’t have access to “privileged information”, at least not on the sell side. We should do the best job of parsing, aggregating and consolidating public information.

    of course proprietary has a role to play in market research, but the language of “privilege” smacks of conflict of interest and arbitrage to me. While I appreciate that as an analyst I do have incredible access to people and information, I always prefer situations where information is commonly shared.

  4. i should have said- i LOVE martin hingley’s definition

  5. Jonny, not just comparing analysts to bloggers.

    My note about “thousand points of influence” included sourcing advisory firms (like TPI), media, benchmarking firms, vendor white papers – and most importantly peer input from other buyers. In a complex tech sale there are 20+ steps…industry analysts with their magic quadrants etc are more influential in the “top of the funnel” but have little input in the due diligence or negotiation steps… when you place analysts on that grid of 1,000 you will be shocked how little influence analysts truly have. Trust me I have been on many points of that grid as an analyst, as a Big 5 sourcing consultant, now as a negotiator…it’s humbling how little influence any individual source has.

  6. Jonny,

    It seems that the Trust Barometer asks survey respondents if they trust “analyst reports”. Now, to me, that’s not the same thing as asking whether you trust individual analysts (people with names and faces). Do you interpret it as one and the same?

    For example, I don’t think very many people would say they trust individual stock analysts above other sources of information — too few scruples on Wall Street! Yet, many people trust the market overview/trending reports published by the financial advisory firms and related outfits like First Call.

    So, I’m not sure so that the Trust Barometer does in fact show that people trust “analysts” more often or more deeply. It seems to show that the trust is in “analyst reports” and it’s a combination of stock and analyst reports at that.

    Very interested in your thinking on this.

  7. An analyst’s approach will allow them to provide decent info about the past.
    Most trusted analyst sources I know of are fairly (or very) conservative, so if you work in a fast moving environment, heeding analyst advice for decisions is often a tad too safe and thus detrimental to your business success.

    If they step outside the conservative realm, their reliability as well as trustworthyness drops dramtically.

  8. Great comments everyone – thank you for taking part in this debate.

    To answer a few of your points…

    @james governor
    Privileged is a key word as it means that analysts have a unique insight into a market. Whether that is because they have access to hard-to-get information or whether they can take public data and apply their own IP still gives them a truly unique insight which I call ‘privileged’.

    @barbara french
    The trust survey has stacks of data – the graph I showed refers to reports but there are many others that mention the analyst as a role too. My apologies for not showing all the graphs – but recommend you look at the trust barometer data showed in the link to get all this information.

    @vinnie mirchandani
    I agree in that there are a thousand points of influence. However, as a group I believe that they punch well above their weight and have a significantly larger influence than others. As an AR pro and give advice to firms regarding how to maximise their limited time, it makes sense to target this bunch as it gives greatest impact vs. activity.

  9. Take a look at the whole sales cycle and ask which analysts influence when clients make reference calls. Do analysts help when a client does a data center visit? Do analysts help in the pricing negotiation? These are critical elements in a technology procurement and I would suggest no or very lttile analyst in sight. Analysts are influential in the first couple of steps of the sales cycle with their magic quadrants, but later other “influencers” grow in importance.

    I would suggest the role of AR is to help sales throughout the sales cycle not just the early stages…Jonny that is where I disagree with you, Carter and others. You make a living coaching AR folks, AR folks budgets are depending on puffing up importance of analyst firms etc – so this ecosystem has to keep justifying status quo, when in fact it should be broadening its horizons and understanding all the influence points

    As I commented on Carter’s diplomats struggled post Soviet Union breakup. They wanted to keep dealing with that one entity and it took them a while to adjust to the fragmentation but that is the reality.


  1. 1 Analyst of the year « The Naked Pheasant
  2. 2 Analyst of the year (Part 2) « The IIAR Blog

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