We were lucky enough to have the CEO of RocSearch, one of India’s fast-growing technology business research firms, come in to Lighthouse’s London office on Wednesday. Our point of connection is that Neeraj Bhardwaj is an alumnus of London Business School, like most of the members of Lighthouse’s board.
Neeraj outlined the path of evolution followed by the most recent wave of the business research industry in India. Generalist consultancies like McKinsey & Company led the way, in many regards, and now firms like RocSearch (whose research spans IT and a number of industries where innovation is driven by technology) are large enough to develop deep specializations. This evolution has brought researchers from data entry into projects where they are structuring the problem and following their own methodologies to resolve clients’ research needs.
Generic research skills, such as those in any business degree, will give researchers a good idea of how to break questions down. However, understanding context, building relationships and crossing the cultural divides are the tasks that have to be addressed to reach the highest value opportunities.
That’s where RocSearch has been able to get to: it now serves many of the top ten consultancies and a number of well-known research-driven businesses. Indeed, it’s been a few years since it took the step forward into selling reports in its own name, as well as ‘white label’ research. The pricing of its typical reports quickly got into in the range of $1,000 to $2,000 each. That suggests that, in the eyes of its customers, the firm’s research is at least on a par with the second tier of analyst firms.
Of course, all analyst firms are evolving away from reports. A few years ago some analyst firms got over three quarters of their revenue from reports, and now it’s under a quarter. That’s the pattern at RocSearch as well: so much work is being generated by in-depth, customized projects. Indeed RocSearch, like a number of firms, could easily drop, or separate, its informational, off the shelf, reports. As it develops a customized, in-depth rigorous approach to projects, reports become an exercise in developing consultants’ writing skills rather than a major business line.
Predictably, RocSearch and firms like it mirror the processes of many of the analyst houses: a research team; a separate peer review group; and a separate quality assurance process involving editors with advanced training in journalism and business writing. Indeed, as those processes become more similar, it is easy to imagine a Western analyst firm merging into, or developing a comprehensive joint venture, with such a firm. This is especially likely in the US, where low productivity per hour has created a open mind in many businesses towards off shoring.
RocSearch is also following the same trend as other research firms in broadening its market focus. Whilst a lot of its work is in technology, it researches in other IT-rich sectors including financial services, pharma, retail, real estate and so on. As ‘best practice’ research processes become more institutionalized, the value proposition of cost effective access to bright MBA man-power, with flexible delivery models, starts to work in a broader range of segments. As the firm grows, it can also provide scalability and faster time to market to a broader range of clients. That will allow it to work with research firms and research-driven consultancies but also to reach out to VCs, investment advisory firms and boutique investment banks.
Of course, the difficult question is: what does this mean for analyst relations professionals? As western firms offshore more of their research, to places like Eastern Europe, India and the Philippines, do analyst relations professions need to be including those firms in their analyst outreach. The answer, surely, is yes.
Duncan, Another excellent post. This article in last week’s New York Times touches on your topic:
I know of a couple firms in the US that outsource research to India under their own “brand”. I guess the challenge for AR professionals is finding out who is really doing the work and then get on their radar….
Thanks John, you’re right that this is a serious challenge for AR professionals. Of course, firms like Forrester, Gartner or IDC don’t want offshore researchers to reference that they are clients. That will make it hard for AR managers to be certain that they are allocating the right resources. But it also suggests why AR teams now need to be segementing their effort between ‘narrow band’ high-touch AR and ‘wide band’ support for a larger community of analysts through portals, email and internet/telephone conferences.
The use of outsourced survey work by IT industry analysts has been going on since the first analyst firms set up shop. Why do you see a difference between outsourcing to local firms (regardless of region) and offshoring, in terms of impact on vendor/agency analyst relations?
There’s a lot more than survey working being outsourced but the big difference is this: when Forrester outsourced to Doculabs, the vendors could and did communicate with Doculabs. And it was open. Of course, that sort of working just isn’t happening now. No vendors are briefing these firms in India…