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November 15, 1999

Analyzing The Analysts:
The Knowledge Merchants
continued...page 2 of 7

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Fluor is in the midst of a reorganization that includes the formation of a new policy governing IT spending and standards for every line of business in the company. Benner has relied heavily on a Meta analyst to guide him through the process based on similar work he'd done for other clients. The time it has taken to get a high-quality IT policy paper completed is dramatically less than if he'd used the traditional approach of drafting a document, then having everyone go through it and make changes, Benner says, adding that, "I'm doing in three days what would have taken more than a month."

Many executives, feeling the pressure to make crucial decisions more quickly than ever, say time savings is probably the biggest payback from using these firms' services. "The volume of work that needs to be done is too much for us to handle internally," says Mike O'Dell, information services director at Wacker Silicones Corp., an Adrian, Mich., chemicals company that used Gartner Group, the largest and best-known of the analyst firms, to help formulate its E-business strategies. "Gartner helps us to avoid products that are doomed to fail from the beginning. There's simply not enough time for us to do it ourselves."

NextLink Communications Inc., a Bellevue, Wash., communications company, relies on research by the analyst firms to confirm its own findings and when making decisions such as migrating to a new technology. Gartner's best-practices and trends data has allowed the company to benchmark itself against similar-sized companies in the same industry, says Michael Brekke, NextLink's LAN systems manager. Brekke says he doesn't make decisions based on the research alone, but considers it good supplemental information. "It's not the be-all and end-all, but it helps," he adds.

chart The leading analyst firms have become so influential that their opinions can help IT chiefs gain senior-management approval for technology investments. At G&T Industries Inc., a foam-manufacturing company in Grand Rapids, Mich., IT director Steve Springsdorf received the go-ahead on projects in part because Gartner research supported certain technologies. Senior management has "an awareness of the technology" because of the Gartner research, which Springsdorf says helps add credibility to the IT organization's decisions. Springsdorf most recently used Gartner research to help select an enterprise resource planning package. "We would have had to consider 100 packages," he says. "The research helped narrow our search down to a few vendors."

Many companies turned to analyst firms for help in solving the year 2000 problem. A large majority of the managers surveyed are pleased with the advice they got. Only 5% say that they weren't at all satisfied with Y2K analysis and research.

Some used the firms to help select effective Y2K tools and services in what rapidly became an overcrowded marketplace that included inexperienced vendors. Mony Group employed Meta to come up with a short list of reliable Y2K vendors. "If we had to do it ourselves, I'm certain the list would not have been as complete and the process would have taken a lot longer," says CIO Rogers.

United Parcel Service of America Inc. in Atlanta did all of its own Y2K conversion and testing, but brought in an analyst firm to evaluate the work. "They made sure we were on the right track compared with other companies," says Jerry Skaggs, VP of IS operations at UPS. "We used them as a sounding board and benchmarking tool."

IT executives say the most important reason to buy research reports is to validate their company's IT strategy (see Behind The Numbers). "We do our own research as far as implementing technologies or analyzing vendors," UPS's Skaggs says. "But we use these firms to see if we missed something." UPS has its own internal research groups that analyze and rank vendors in storage management, mainframes, midrange systems, desktops, and advanced technologies.

Other reasons for buying reports, according to the survey, include learning about best practices and understanding E-business. Managers also find them useful for detecting IT management trends, evaluating vendors, and market forecasting.

While bulletins and reports fill a need, some managers say they get their biggest benefit from consulting, either face-to-face or over the telephone. "The one-to-one meetings are the most important," says Fluor's Benner. "If I want a better understanding of storage area networks, I know that if I call Meta today, I'll hear back from them today or tomorrow and spend an hour on the phone with someone who's got good knowledge of storage area networks." He adds: "I could spend time going over research documents and reports to gain a similar level of understanding, but life's too short."

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