Tag: budget

How much to spend on analyst contracts [AR practitioner question]

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question-mark-graphic.jpgInquiry: SageCircle received the following inquiry via e-mail: “Is our use/cost of the major analyst firms at about industry standard or better – especially as it relates to analyst contracts?”

“Are we spending the right amount on analyst contracts?” is a common question that SageCircle receives. This is one of a group of “standards” or “benchmarks” inquiries (see The Size of the AR Team [AR practitioner question]) that many AR managers wrestle with, often in response to their management’s demands for justification for budgets. While clients want us to provide a simple rule-of-thumb for analyst contracts (e.g., as a percentage of vendor revenue), we cannot provide it. Through our research, we have discovered that comparable vendors (in terms of markets, total revenues and number of employees) can have dramatically different analyst contract requirements.

The more important questions that need to be answered are: “Are the contracts providing us the services we need to reach our defined goals?  Are we managing the contracts to get full value? 

For end users clients, usually IT managers at large enterprises, the answers are much more clear cut. Even though enterprises use analysts for a variety of purposes (see Why technology buyers use the IT industry analysts), these purposes basically fall into either strategic and tactical decision support. Thus, spending can be focused on active topics and activities, especially where internal expertise is not available.

How much IT and telecommunications vendors spend on analyst contracts is dependent on a variety of factors. In this SageCircle blog post, we will focus on identifying the factors.

Breadth of usage – How many different functions in the company will analyst research and advice be supporting? The broader the usage, the more […]

Budget cutting can help AR focus and innovate

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icon-budget-cuts-105w.jpgIt is a fact of life that because of the reports of economic slowing, marketing departments at communications and IT vendors are considering budget cuts. Because most analyst relations teams report to marketing, there will be trickle down cuts hitting AR as well. Unfortunately, most AR functions are already short of staff and funding resources so the natural reaction is to perceive that budget cuts are only bad. However, if AR managers use the budget cutting as an opportunity to rethink how they do business the cutting exercise can have at least some positive outcomes.

Any business function can accumulate outdated expenses, activities and techniques like barnacles on a ship. An example can be always buying 20 advisory seats during the annual analyst services contract renewal even though only 14 are really being actively used. Another example is spending too much money on analyst events by selecting fancy destination hotels when analysts would prefer a more convenient and often cheaper location. Yet another example is buying expo floor booth space at firm conferences because “everybody knows” that they are great sources of leads when no investigation of lead generation effectiveness has been done for years, if ever.

Besides eliminating unnecessary spending, a budget cutting exercise can also surface innovative approaches to accomplish tasks that actually might be more effective done in some other way. An example here is substituting “Deep Dives” for the annual […]