Saturday, February 02, 2013


Five Mistakes CIOs make in asking analyst firms to create vendor shortlists...

I have lots of friends who are industry analysts and have over time come to appreciate the variety of tactics some use to take money from large enterprises. I am of the belief that if I publicly suggest a better way, that the marketplace for innovation will improve and that the best products/services will thrive...

1. Choosing analysts that have never walked in your shoes: Analysts come from a variety of backgrounds ranging from journalism to consultant to even having been a practitioner in an end-user company. While it is possible for those who are journalists to learn the nuances of products, just like consultants they have never had to live with the choices they have made.

2. Not understanding analyst bias: Many CIOs remain blissfully ignorant as to which vendors purchase services from analyst firms and which vendors choose to skip paying fees. If you are going to trust an analyst firm to help you create a short-list, you should demand that the analyst firm provide full disclosure in this regard. Even after disclosure, you should ask for an even number of choices of vendors that both subscribe to the analyst services as well as a few that do not.

3. Not understanding analyst revenue streams: Some analyst firms have gotten particularly good in helping customers build shortlists. In this scenario, if you are replacing an existing system can you truly trust analyst guidance? Is it in the best interest of the analyst firm to get you to switch to something new where they can create an engagement or to tell you as part of a "seat" that there are ways to achieve your outcome without requiring a rip and replace?

4. Not understanding interoperability: Nowadays, whenever you purchase an enterprise application you will more than likely integrate it with other enterprise products. Having an understanding not just of functionality but system qualities such as the performance or security measures that a vendor took when developing a product will help avoid many headaches down the road. Many analyst methodologies are simply based on anecdotal conversations with marketplace players, industry analyst relations professionals and sending out surveys that almost never ask for any information around performance benchmarking, applicable information security standards, etc.

5. Not understanding integration vendor coupling: Whenever you purchase a product, it will almost always require professional services. It is important to know upfront whether the required consulting services can be delivered by others in the marketplace or solely by the software vendor itself. Not having choice in integrator will most certainly increase the costs of implementation.

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