Turning Back the Clock -- When Analysts Get it Wrong
A few weeks back, David Bush penned an excellent little number over on E-Sourcing Forum highlighting how industry analysts can get vendor predictions wrong -- sometimes very wrong. The subject of David’s analysis was a 2002 report from Forrester Research titled Stand Alone Sourcing Apps Vanish. According to Forrester's predictions at the time, stand alone sourcing vendors would fade by 2003 as users flocked to integrated sourcing applications from ERP, SCM and product-design vendors. Ha! Now that didn't exactly happen, did it? Emptoris and Iasta are flourishing, among others. CombineNet has carved out an excellent niche for itself. And others, such as BravoSolution (which recently acquired Verticalnet) are aggressively getting back into the fight. But it's 2008? Shouldn't they have died by now if we were to have believed Forrester's prediction?
David's advice is spot in. Some industry analysts look at their industry "in a vacuum, without out giving the vendors any credit for survival instincts, business sense or pride in their businesses ... Moral of the story -- read these reports as a single data point. They are not written by Warren Buffet and many are done without research to fully back the findings." Amen, David. Many industry analysts are not just human -- they're not deep in the sector they cover. Fortunately, there are exceptions to this. I give both Mickey North Rizza and Debbie Wilson -- despite her recent crazy quadrant blunder -- credit for knowing their subject matter. But many others in the sector treat Spend Management as a hobby. For this reason, we should treat their vendor analyses and prognostications with more than a grain of salt.
- Jason Busch
David's advice is spot in. Some industry analysts look at their industry "in a vacuum, without out giving the vendors any credit for survival instincts, business sense or pride in their businesses ... Moral of the story -- read these reports as a single data point. They are not written by Warren Buffet and many are done without research to fully back the findings." Amen, David. Many industry analysts are not just human -- they're not deep in the sector they cover. Fortunately, there are exceptions to this. I give both Mickey North Rizza and Debbie Wilson -- despite her recent crazy quadrant blunder -- credit for knowing their subject matter. But many others in the sector treat Spend Management as a hobby. For this reason, we should treat their vendor analyses and prognostications with more than a grain of salt.
- Jason Busch
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It turns out that predicting the future is not so easy for anyone; Weathermen, Wall Street analysts, or eSourcing industry analysts. Again, "The Black Swan" is a good read on the subject, if you find yourself thinking that predicting the future is possible. We're not so smart as we imagine we are.
# Posted By Mike O.
| 6/25/08 2:36 PM
You're not paying weathermen tens of thousands of dollars to guide your decision (unless you have your own). Gartner and Forrester have an obligation based on their fees to at least be more right than wrong in their predictions. In this case, Forrester was dead wrong. In the investment world, individual analysts and firms can go down when they miss the mark. In the industry analyst world all they need to do is wait until the next vendor briefing to make some new prognostication. What is needed is true expertise in the area -- something Forrester lacked back when they made this prediction and they still lack today.
# Posted By Jason Busch
| 6/26/08 10:39 AM
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