Will the analysts drive down IT spending? Not if you talk to them.

In Saturday’s New York Times Business Day section there was a reassuring article by Steve Lohr called Belt-Tightening, but No Collapse, Is Forecast in Technology Spending. Reassuring because the IT executives and industry analysts interviewed all indicated that there was less likelihood that IT spending was going to be slashed like during the 2001 recession. Whew, it looks like the IT market will dodge the bullet this time! However this relief could be short lived if the IT analysts turn negative and start counseling their IT buyer clients to be conservative and cut spending.

What could turn the IT analysts negative on spending? The analysts could flip their opinion if all they hear are the concerns and fears of budget cuts from nervous IT executives. As explained in this post, analysts like Gartner that rely on anecdotal data gathered via ad hoc end-user inquiry can be easily swayed if they hear only one side of a story. In this situation, if the analysts are only hearing from IT executives who are experiencing budget cuts then the analysts might conclude that budget cutting is more widespread than they originally thought. This would cause their commentary in published research and in press quotes to reflect a more pessimistic point-of-view, which could then lead CIOs and CFOs to conclude that they now have to cut IT budgets to remain competitive. Voilà! A self fulfilling prophesy is launched which could hurt many IT organizations and IT vendors.

What can you do? Provide the analysts with a balanced view of what is happening budget wise.

SageCircle Technique:

IT managers – Set up inquiries with your analysts and discuss the approach toward the IT budget that your company is taking.

Vendor AR teams – You can take either an inquiry or briefing approach. In either case, the best spokespeople you can use are your CEOs and/or senior sales executives. The approach to take is an exchange of intelligence between the analyst and the spokesperson about what they are hearing from CIOs and other senior IT managers. Hopefully, your spokespeople will have many examples of IT organizations not drastically cutting spending.

Bottom Line: It is in the best interest of everybody in the IT industry that analysts have a balanced view of major trends or issues in the IT industry. While it is not typical to discuss something positive or status quo with the analysts, there are times such as the current economic uncertainty where that sort of conversation can be very valuable to the analysts.

Question: IT Managers – Have you ever called an analyst to provide input into a situation where nothing negative like budget cuts is happening? Analysts – How do you ensure a balanced set of data points from clients?
 
Are you getting the most from your analyst contracts? SageCircle can help. Our strategists can:

• Evaluate the usage of your contracted analyst services and suggest ways to maximize business value from your investment
• Train your colleagues with analysts seats (e.g., Gartner Advisory and Forrester Roleview) through efficient and effective distance learning via webinar or teleconference
• Critique your upcoming analyst contracts to ensure you are getting the right services from the right firms to meet your business needs
• Save you time, money and aggravation

To learn more contact us at info [at] sagecircle dot com or 650-274-8309.