CIOs are reducing spending on analyst services, and no matter how much the economy rebounds, it’s unlikely they’ll ever spend as much as they once did. But they say they can get the same quality of research and analysis as before with a much smaller investment. Here’s how they’re doing it.
1 Figure out what you already have. CIOs are often surprised to learn what services are being used by lower-level IT staff, and even more surprised to learn what subscriptions they’re paying for that they don’t use. “CIOs tell us, ’Oh, we use just this one firm,’” says Norma LaRosa of the Kensington Group, an analyst-tracking company. “But I’ve already talked to their staff, and their staff is using about five other firms too.”
2 Figure out what you need. After taking an inventory of your library and subscriptions, cut the deadwood. “Subscriptions are only good when you have huge initiatives that require ongoing analysis,” says Louise Garnett, vice president and lead analyst of Outsell. In most other cases, whether you’re trying to learn about a market, get smaller projects rolling or do basic remediation, by-the-drink purchasing of research and analyst services is preferable.
3 If you’ve got a subscription, use it. “It’s actually work to make sure we’re utilizing our Meta subscription,” says the vice president of IT at a large manufacturing company. “I’ve got people who use a lot of different ways to get information” without thinking to use the subscription. “I just have to make sure we’re using the service we’re paying for.”
4 Replace research services you pay for with experts you already employ. “Without a doubt, we’re smarter about IT in-house,” says World Wildlife Fund Vice President of IT and CIO Greg Smith. “I only go to research if I don’t have the answer.” But more often than not, Smith has found that someone in his department will.
5 Use boutique analyst firms. Boutique analyst firms that specialize in a narrow band of technologies or processes are good for hand-holding on a project, details within projects (for example, HIPAA compliance), and they’re likely to be happy to work with you on a per-project basis. Both CareGroup Healthcare System CIO John Halamka and Vice President and CIO John Glaser of Partners HealthCare System have shifted their resources from big analyst companies to boutiques. “Health care has all sorts of new IT analyst groups,” Glaser says. “Deep is better than broad now,” says Halamka.
6 Use analysts, not firms. When you find an analyst with whom you work well, whether from a big firm or a boutique, care for that relationship. “We needed to analyze our website, and when we found a guy at Meta, he was amazing, worth every penny,” says a chief technologist from a large manufacturing company. “When you find one of them, you don’t want to let him go.”
7 If your analyst jumps to another firm, jump with him. In the long run, the personal relationship you have with your analyst is more important than the methodologies of the company he works for.
8 Demand metrics on analysts’ experience. You have every right to know if the analysts have ever been on a project comparable to yours, what clients they’ve advised in the past, and how many years they’ve been in the business.
9 Demand ethics. Ask firms for a breakdown of their revenue by sector (vendor, end user, other). Ask analysts for the names of the clients they’ve worked for. That might color their analysis. Ask them to show you their company’s ethics policy. “CIOs never asked who paid us,” says former Giga and Forrester analyst Rob Enderle. “They didn’t ask about our relationships to vendors. I was always kind of surprised that they didn’t seem all that interested or concerned about it.”
“If CIOs ever knew how much energy and money is being spent by vendors to buy influence while maintaining that sense it comes from an independent authority, they’d be shocked,” says LaRosa.
10 Set the price. Negotiate. Shop. Pit analysts against each other. “It’s a buyer’s market. The competition is the most intense I’ve ever seen,” says the vice president of IT at the large manufacturing company. “I’ve had more face time in the last eight months with a Gartner rep than ever?and I’m not even a Gartner guy. Right now, we’re paying by the drink for a lot of services. Salary benchmarks. IT spend benchmarks.
“Look, they don’t have a choice. As we try to reduce spending we’ve found we can say, ’We’ll take just that.’”