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November 15, 1999

Analyzing The Analysts:
The Knowledge Merchants
There's a symbiotic relationship between analysts and IT execs that revolves around one word: Trust

By Bob Violino

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echnology has a habit of turning conventional wisdom on its ear. Take that old saw about knowledge and getting ahead: In IT, it's not who you know, it's what you know--and that's the problem. "Anyone in IT who tells you they're completely up-to-date is naive," says Dennis Benner, VP and CIO at Fluor Corp., a construction and engineering company in Aliso Viejo, Calif.

This is true despite the fact that technology managers have never had more sources of information about their world--or maybe because of it. Many managers say the plethora of industry data--from sources such as trade organizations, business and IT periodicals, internal data-gathering systems, and the ever-expanding Internet--demands analysis and interpretation that's difficult and time-consuming to generate. This is especially true with such fast-emerging opportunities as E-commerce and E-business.

"It's easy to have a modest awareness or understanding of what's going on," says Benner. "But to have an in-depth, detailed understanding and to know what's important for your business involves more than just skimming press releases and articles."

That's why many companies depend on research and analysis firms to help them spot new products, figure new strategies, and sort real trends from false leads. These days, that imperative comes from the top.

Photo by Michael Greenlar E.P. Rogers, VP and CIO of Mony Group Inc., says that earlier this year, the company's CEO was on a panel at a West Coast conference with Larry DeBoever, at the time an analyst and now general manager of worldwide sales and marketing at Meta Group. "By coincidence, the two sat next to each other on the return flight, talking about technology the whole time," Rogers says.

When the New York insurance and financial-services company started planning its E-commerce strategy this summer, the CEO brought in DeBoever. "We had a great dialog," says Rogers. "Larry shared his experiences in this area, and we're now in the process of building our E-business. He was a catalyst for moving it forward."

That close association is increasingly characteristic of the relationship between analyst firms and their business clients. At their best, research firms provide insight and analysis of the IT industry's most current products, trends, and practices. They do this through a variety of means: by polling users of technology, tracking the shipment and sales of products, interviewing vendors, and analyzing news reports and industry bulletins. Also, analyst firms compete with each other--and, increasingly, with user companies--to hire the brightest and most experienced IT talent.

Companies are tapping a variety of services offered by research firms, according to a survey of 271 IT executives conducted recently by InformationWeek Research. The most popular of these are electronic newsletters, alerts, and bulletins--which makes sense, given the current frenzied business and technology climate. It also tracks closely with the results of a similar survey conducted two years ago. Also popular are research reports, either by single or multiple topics. Businesses, on average, buy more than 100 research reports from these companies annually, according to the survey. Larger companies (those with more than $500 million in annual revenue), are more likely than smaller ones to purchase these reports; they buy an average of 175 per year.

What are managers reading about most? No surprise: The Internet and how to develop E-business strategies are among the most popular reports. Three-quarters of the managers say they've bought Internet infrastructure reports, and about seven in 10 have bought E-business strategy studies during the past year. Other hot topics include business applications and operating systems.

Fluor's Benner says his company has come to rely on Meta Group's expertise for nearly all its major IT undertakings: "Whenever we're doing something that takes us into a technology with which we don't have strong expertise, the first questions I always ask people are, have you talked to Meta and what are they saying? And, is this a blind alley or something we can build on?" Benner says Fluor spends more than $100,000 annually on services from the firm. "We don't have them making decisions for us, but they get us a list of candidates--whether it's technologies or suppliers or service providers--to narrow our search. They have the expertise we don't."