Anatomy of a CRM Analyst

They publish rafts of research, hang their shingle as prophets of CRM wisdom, and regularly provide insight to publications like CRM magazine. Yet for some end users the exact role of the CRM industry analyst is shrouded in mystery. They are more than quotes and missives sent from above, and most have substantial experience managing enterprise change. Not one CRM analyst firm--and there are well over a dozen competing for attention and dollars--exactly resembles another. Some firms--like Gartner, for example--make their mark with industry predictions and vendor rankings. Others, like IDC, focus largely on data snapshots and forecasts. Most provide some degree of strategic advisory and consulting services, but each has its own unique mix. How They Work Analyst firms provide their services either on demand or on a subscription basis to clients, which comprise end-user businesses, industry vendors, and investment firms. Published research ranges from one-page notes on a particular tactical business function or piece of software, to annual reports running hundreds of pages long that provide a view of the industry and advice for the year ahead. Analyst inquiry services are typically Q&A sessions that focus on a specific business or technology problem, or slate of problems. Research agendas tend to be planned months in advance, much like a magazine, although typically there are openings in the plan for hot new developments. Firms like Forrester Research regularly poll their customers on research topics and pledge to cover the most popular topics within a short time frame. Despite the pressures of research deadlines most analysts say they spend most of their time focusing on client needs. "If you call in at random and talk to one of our analysts, the odds are good that they've talked to a user that day," says Ian Campbell, CEO of Nucleus Research. Most analysts told CRM that they spend no more than 35 percent of their time working with vendor clients. When analysts do meet with vendors it's often for an update on product releases or company direction. "If it's me asking for the briefing, 95 percent of the time it's because we're getting [client] inquiries that I don't necessarily know the answer to," says Sheryl Kingstone, CRM program manager at The Yankee Group. "If it's vendor time, they're usually updating me on what their functionalities are." Although most analysts have a stated policy to give no special treatment to vendors that have strategic consulting or report-subscription accounts, one developer recently lamented to CRM magazine that an analyst had replied to its recent briefing requests with strongly worded suggestions that the company start a client relationship. Responding to this scenario, Forrester vice president Erin Kinikin says, "The hardest thing for a vendor to understand is that analysts don't necessarily need to know that you made an executive change or that you shipped 19 new features in your [latest] release. What we need to know is how what you do applies to the business problems clients have, and if you can tell us that we'll talk to you a lot--and if you can't we may not talk to you at all." Analysts' unique position as confidante to dozens of vendors and hundreds of clients every year gives them access to information and experiences that most CRM strategists in a single company would lack. As a result, some analysts, such as Beth Eisenfeld, a research vice president at Gartner, will actively work as relationship manager between vendors and client organizations, a skill she developed through a career in business and IT management and consulting spanning two decades. "I've had to make those tough calls, [such as] telling management that you can't put nine pregnant women in a room and get a baby in a month," she says. Barton Goldenberg, president and founder of analyst and consulting firm ISM, says that this external management role can be crucial to making sure a CRM implementation is best for the end-user's business, rather than for the integrator or vendor. "[An integrator] recommended a way to integrate two things in Siebel to the tune of $750,000. We found something else that was $50,000, and we forced them to put it in," Goldenberg cites as an example. "That's external, objective advice." Building the Perfect CRM Analyst Analyst firms draw talent from many different areas of business and technology. "I'm not sure anybody aspires to be an analyst--I think it's one of those things that finds you," says Liz Roche, vice president and CRM practice lead at META Group. After 15 years in IT project management, a contact from a data warehousing project invited her to join the research company he had recently signed with. "It was a great way to combine my liberal arts legacy with the practical business experience I had," she says. Roche's resume is typical of the business--industry analysts rarely are recent college grads. "There are a lot of gray hairs in the business," quipped one analyst. They are frequently, but not always, from marketing or IT backgrounds. "[Many] have undergraduate or master's degrees in computer or electrical engineering," says Joe Outlaw, president of Outlaw Research, "but I have also seen people with college degrees in arts, literature...practically anything." Of course, all are firmly convinced that their background provides appropriate insight for the problems facing CRM adopters. Kinikin, who spent more than 12 years in sales and marketing management at technology vendors before becoming an analyst, says of her experience that it's "very appropriate to the issues [other] marketing managers face all the time: How do I get the most for my budget? How do I measure the results of my marketing campaign and justify my existence? I've lived that problem." The occasional analyst comes to the business not from a practitioner, consulting, or marketing role, but from the business press. The 451 Group's Martin Schneider, enterprise software analyst, left CRM magazine earlier this year to hone his industry-watching skills in a different environment. "That [experience] gave me an interesting insight," he says. "Not only did I have my finger on the pulse of what the vendors were doing, but what people were actually buying, actually implementing, and using on a daily basis." Although some research firms, including Forrester, IDC, and Gartner, are publicly traded and employ hundreds or thousands, the direct chain of management tends to be quite shallow. "By and large analysts have a huge amount of flexibility, but by the same token, if I go off and start writing a bunch of things clients aren't interested in, and they don't read them and don't ask questions about them, I'm not going to be considered a successful analyst," says Elana Anderson, senior analyst with Forrester and a 15-year veteran of marketing and data warehousing project-consulting. On the other hand, in recent years some high-flying analyst firms have folded, while others have splintered as experienced analysts left established companies to start anew. "We overbuilt the analyst industry in the late 1990s and early 2000s, [because of] the simultaneously cresting waves of ERP and CRM," says Denis Pombriant, who was with Aberdeen Group through 2003 and is now managing principal of Beagle Research Group. These independent analysts, like Pombriant and Joe Outlaw, are totally self-managed and often do not even directly engage in the sales process, outsourcing that task to aggregators like Valley View Ventures. Large or small, Kinikin says that the role of analyst has become more strategic in recent years as the sheer volume of available information about CRM has grown. "Because of Google more of our focus is on client interaction than it was five years ago. Clients come in with a huge binder of reports, they want someone who can help them apply all this theory and put it into practice, and consequently we're writing fewer reports and spending more time with clients." That focus on strategy has many analysts experiencing an evolution in their role, from helping companies sort through available technologies to helping them create CRM strategies. "Traditionally what analysts do is look at technology A versus technology B [and explain] what are the pros and cons, what's more mobile, and what's faster," says Chris Selland, vice president of sell-side research at Aberdeen Group. "These days what I'm trying to explain to people is that it starts with the business problem." He says he has deliberately resisted being called a CRM analyst to avoid confusion that he focuses primarily on CRM technology rather than overall business strategy. Guy Creese, managing principal of Ballardvale Research, says that the consultative shift has been enabled in part by the recent surge in small, independent analysts like himself. "The community is saying, 'I don't necessarily need this big, branded hunk of reports, I need a sharp thinker who can help me out of this jam.'" With many analysts agreeing that they spend more time in discussions with clients, where is the line between consultant and analyst drawn? "Generally the consulting model is one-to-one, and they will sit down and go through a long diagnostic on a problem and decide how to solve it. But what they may not have is a survey of 250 other companies looking at the same business issues" as an analyst would, Selland says. "If somebody says, 'We're not happy with how the call center is performing,' [an analyst firm is] not going to go in and try to do a diagnostic. It should already have worked with a number of companies that have the same problem and would have on the shelf some surveys or a study already done." Also, unlike some consultants and integrators, analysts typically have no direct financial stake in the selection of any given technology or strategy, as they do not collect vendor margins on software sales or perform billable implementation work. Vetting the Analysts You won't find a state licensing certificate on an analyst's wall as you would for a doctor, lawyer, or even hairdresser. There are no international standards bodies setting the code of conduct for self-proclaimed analysts. But one standard seems to be experience. "There's an old joke in software sales: How long does it take to become a software salesman? The answer is, 'Your business cards are here!'" Pombriant says. "But I don't know anyone who is in the trade and doing a decent job of it who hasn't been in the technology arena for ten to twenty years." So how does an executive choose the right analysts to work with? "It takes a lot of introspection if you can only choose one," Roche says, acknowledging the constraints that have led large companies to reduce their budget for analyst services and many smaller companies to eliminate spending altogether. She suggests careful consideration of the desired level of personal contact versus the depth and breadth of the research library, which tend to be mutually exclusive unless the firm has a large staff capable of dividing and conquering both sides of the equation. Analysts routinely ask vendors to provide dozens of client references to validate their success--don't be afraid to demand the same of the analysts. Consider advice as seriously as you would any other line item on your CRM project. "Analysts are not cheap. Even though the price is coming down, you are still paying good money for an informed opinion," Creese says. While some analyst firms interact most often with CIOs, today many analysts increasingly are meeting with end users' CRM strategists on the business side. "We're focusing on line-of-business vice presidents--not necessarily the people setting the corporate strategy, but they're the people who have to get things done, [like] go in and fix the call center," Selland says. Analysts never promise to single-handedly fix a company's customer strategy, provide a single bullet-point item to ensure a perfect transition to CRM business practices, or guarantee the future. But most of the CRM industry's voices have a number of years backing their words, and take their responsibilities seriously. "Being an analyst is a chance to share what you know and give back, in a broader context than you can [by] working for any one vendor or user company," Kinikin says. That's the nice version, anyway. More candidly, she says, "We're the manure filters for the industry." Contact Executive Editor Jason Compton at jcompton@destinationCRM.com Guns for Hire? Ask any analyst about her relationship with a vendor and you will likely hear about a strictly arm's-length arrangement. Dig deeper and you might hear her lament what she sees as a misconception that analysts are an "extension of the marketing arm" of business technology providers. "When a vendor says, 'We need some visibility, would you write a research note [about us]?', I say, 'No,'" says Liz Roche, CRM practice lead at META Group. Last year Aberdeen Group replaced its chief executive and a number of its analysts. New CEO Jamie Bedard has since regularly denounced what he says was the "white paper for hire" culture at the firm, where vendors could commission reports on a proposed topic that would then either be available to the vendor for redistribution or resold on to the research client base. "Too much of the money has come from the vendors, and we are 1,000 percent focused on changing that," says Chris Selland, vice president of sell-side research. Despite Aberdeen's strong language, some analysts from other firms still say they write commissioned white papers to appear under the vendor's brand as a matter of course. And even those analysts who say they have no part of vendor-guided research readily acknowledge that user inquiries provide major influence over their research direction, meaning that vendors can still use marketing messages to prod analysts into tracking their pet projects. Vendor/analyst influence can also be more subtle and difficult to detect. Nothing prevents a technology vendor from taking a financial position in an analyst firm, and such relationships could be difficult to uncover in a publicly traded analyst organization and virtually impossible to discover in a privately owned group. So potential clients of analyst insight and services should be aware that they are ultimately dealing with organizations that may have complex business relationships. Buyer beware. --J.C.