Conflict of Interest? What Conflict of Interest?

There’s a popular perception that the problem with the analysts’ business model is the conflict of interest inherent in depending on revenue from the vendors they analyze for CIOs. Many former analysts and industry watchers believe it is, in fact, a concern, saying that at the very least it puts an unreasonably optimistic sheen on forecasting and research. “What analyst at a public company is going to tell you to skip a generation of a product made by one of the vendors that’s paying him?” asks Jerry Michalski, a former analyst at New Science Associates (which was acquired by Gartner in 1993) and now president of his own boutique firm, Sociate. “Who’s going to have the courage to risk that revenue?”

But most CIOs believe this is a nonissue. “We know how to navigate around that,” says CareGroup Healthcare System CIO John Halamka. “It’s a fact of life. We can deal with it.”