Where’s the innovation in the analyst industry?

How can a 20th-century analyst firm like 451 Research become more relevant? That’s the question that Andy Lawrence weighed up in discussion at the AR Forum earlier this month. Lawrence was ‘collaboration czar’ at 451, trying to drive the impossible task of getting analysts to cooperate in the context when clients seem to have little interested in more complex, integrative research. The scale of technologies and technology challenges continue to grow, of course, and few organisations really have the processes they need to consider these discontinuous challenges in their business environments. So, while there is a business opportunity to deliver foresight that picks up long-term trends, there are challenges in bringing it to market. How can that research be compelling and palatable? How can research tie together trends to understand the impacts in the five- or ten-year horizon? Can it really engage executives with fundamental issues?
Of course with long-term horizons it’s harder for analyst firms to deliver easy recommendations, but demand is growing (and that is certainly Constellation’s pitch). One approach is to look at the potential probabilities and the impact of possible changes, an approach which echoes risk management, and then to open up discussions from there. Everyone loves the idea of putting Gartner-style probabilities on outcomes, but the real value is when customers can see how changes will affect their business – not simply that changes are on the cards.
The following panel discussion at the AR Forum put that question really under the spotlight when Guy Kirkwood interviewed Thomas Reuner and others about the impact of Robotic Process Automation. Automation is a major trend, which European businesses have a leading role in. Organisations want to know about the impact of AI on their businesses. However, it seems to be service providers and solution vendors rather than analysts who are educating the market. Partly that’s because captive shared services are a common scenario for the deployment of robotics because of the stable and controlled environments of service-centred organisations. However, there’s a lot of talk about streamlining services but few solutions with six sigma are now well enough described to allow automation. Many firms don’t know the potential of automation, and analysts could play a role in educating the market. Despite the apparent opportunity for analysts, it’s the services firms, and especially the Indian firms, who are educating the market. Even sourcing advisers are often very limited in their scope by focussing only on the short-term cost impact (which can be huge) while ignoring the longer-term impact.
Analysts are not all asking the right questions, partly because they are not all out there learning. Sourcing advisors often are simply pushing people down on price in some places, but not seeing the opportunities to transform the most routine and least satisfying work and to allow people to focus on higher value work. Some firms are seeing RoI figures as high as 1000%. The new providers are delivering efficiencies, but I find myself wondering whether the growing focus on short-form research is educating users to think about short-form problems.
Fundamentally, the market for future-oriented foresight is different from the market from analyst insight, which is very current and generally quite short term. Perhaps large analyst firms will struggle to take foresight services to the market because the buyers and buying triggers are so different. If that’s the case, it’s a profitable niche if firms like 451 can recognise opportunities and take them to market. For now, the generalised silence of the analysts on Robotic Process Automation suggests that most analysts cannot and will not do the heavy lifting business development needed to help businesses plan better for the future.
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