June 28, 2011

Will the industry analyst business be dead by 2016?

Eric Garland

Horses for Sources, an IT research firm has written an incisive essay about the fate of the role of the industry analyst in decision making. If you read one thing this week, it had better be this.

This firm sees the traditional industry analyst becoming increasingly irrelevant to decisions any smart leader ought to be making. They are nominally talking about big analyst firms such as Gartner and IDC, but these indictments cover, I believe, all of the consulting world, especially strategic and competitive intelligence.

The piece presents five main points:

  • Short-term attention-span theater has taken over, and some analyst firms are oblivious.
  • There’s too much “research” being produced that’s not telling us anything new.
  • Too many analysts are following the hype and avoiding reality.
  • Buyers don’t read research these days.
  • The large analyst firms lack rock-star visionaries.

I resonated with this immediately because I thought of how useless I find the majority of "serious" industry research. Sure, the big groups can get companies to open their kimonos and reveal (largely distorted) hard numbers about their operations. But the strategic implications of such work are almost always about the status quo. The scenarios are classically dull, almost always along the lines of "Well, we'll either have 1%, 3% or 5% growth." Such work often described the past quarter perfunctorily, and halfheartedly refers to a similar future.

This type of work is losing relevance because so few people look at the implosion of the real estate market, the explosive rise of social media, the impending doom of the Euro currency, or the destabilization of the bond markets and want to hear, "Hey, business as usual: expect 3% growth for the near future!" Something else is clearly afoot.

I think the entire consulting world had better be on its collective toes.

What do you think? Are the Horses guys being a little harsh? Do they see the future with clarity? What does it mean for intelligence?

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