‘Tis the season to make forecasts….

It’s funny: I was just speaking to someone today who is collecting predictions for 2006 from her colleagues, so that they can track themselves against their competitors’ accuracy in some way. It was all thrown into context by this great comment to ‘Analyst Equity’ by Louis Columbus, who points out that many analysts will be called upon to make their 2006 predictions soon.

“Predicting the future is risky business and the true depth of an analysts’ grasp of their space, whether it be shallow and just to the vendor level or to the depths of where automation meets unmet need and pain is one of the clear measures of a great analyst. Now put this dynamic of unmet needs into motion and ask an analyst to predict where those needs will propel an industry in a short twelve month window and you’ve made a sufficient intellectual challenge and set the bar high enough to see which analysts really know what they are talking about, and which are just parroting back sound bytes from their vendor clients.

“Here’s another way to tell the difference between mediocre analysts from excellent ones. Analysts who are reporters will stick to the shallows of vendor discussions and have as a result often have “me too” predictions because they don’t understand the cause-and-effect in their market spaces. Excellent analysts on the other hand have a thorough understanding of cause-and-effect in their markets, which is invaluable for user clients selecting and negotiating for applications and services. Further, excellent analysts have their clients’ interests at heart and regularly will plunge deep into the needs analysis, the met and unmet requirements of users, and try to ascertain just what the essence of their market space is and regularly predict with accuracy the future of their markets not on what vendor clients tell them their roadmaps are, but what they ascertain are unmet needs in the markets they track.

“Put these two people in the room, the analyst/reporter on the one hand and the person who is passionate about bringing change into their clients’ organizations, and their very presence and demeanor will tell you who is the mediocre and who the excellent one. As for the point on analysts not having been in the industries they track, I disagree. The top analysts who thoroughly understand cause-and-effect learned those lessons when their paychecks depended on them, not from pure research. The best research is solving a problem that stands in the way of a paycheck or bonus and the best analysts have had that pressure.

“In closing, the best analysts have a passion for understanding the heartbeat of their markets that transcends their positions, salaries or titles. Their roles are so much more than a job, it’s a true passion to understand and serve user clients with the best advice possible.

That’s excellent insight Louis. Many thanks!

Duncan Chapple

Duncan Chapple is the preeminent consultant on optimising international analyst relations and the value created by analyst firms. As SageCircle research director, Chapple directs programs that assess and increase the business value of relationships with industry analysts and sourcing advisors.