1319 — Commercial IT Research isn’t Always What it Seems, by Stephen Coates, Occidental Communications Pty Ltd

Jun 18, 2004 | Conteúdos Em Ingles

There are between 50 and 75 companies around the world whose primary business is conducting business research and selling commercial research services and reports within the broad domain of IT. They range in size from very small to large, they operate according to a number of business models and they provide very different types of research.

Some specialise in technology and product category uptake forecasts with an emphasis on accuracy. Product developers will spend €5,000 for such reports of no more than 20 pages because these numbers, which they trust to be definitely researched and accurate, will be used to guide them on investments of perhaps millions of Euros.

Then there are those reports that also purport to make such forecasts but which focus on optimism and even flattery of some vendors, likely to be generous customers. Vendors also buy these reports, but do so to wave quotes along the lines of “XYZ Research forecasts a growth of this technology (which we develop or sell) of 120% over the next three years (so buy it now, beat the rush)!” in front of prospective customers. Despite appearances to the contrary, accuracy is not a feature of such reports.

By way of example , one well-known American company presented the market shares of CTI vendors in each of several Asian countries as well as Australia. As only American companies were included in its tabulations, while flattering to these companies who presumably paid handsomely to buy this material and present it to customers and prospects, in contrast to the findings of more comprehensive research undertaken by the author of this paper, they were anything but accurate.

A couple of years ago, this same research publishing company reported ACD market shares in Asia . Not only was a predictive dialler manufacturer who had just introduced a PC-based telephone system (their only ACD-capable product) implausibly credited with a market share of 7%, the list of vendors who supposedly contributed to the “others” percentage included developers whose only products were audio call recording systems, predictive diallers, IVR systems and even workforce management software! What comes out of the north end of a bull facing south!

But it gets better, or perhaps worse. One research publishing company report “predicts growth in web-enabled call centres [whatever that means] from X% one year to Y% another year”. Another reported the “The web-based call centre market [whatever that is] will amass revenue of $X by a specific year ”. Reports also abound forecasting the growth in the “computer telephony” market that may include everything from circuit cards to voice mail platforms to consulting services. These aren’t really inaccurate, they are just meaningless.

In the same vein are those reports which assess companies and products . Amongst these, there are some that genuinely attempt to write assessments that are both balanced and accurate and which can be useful to both the developers and potential buyers of these products. But here, too, one can see the hand of the product developers’ purchase orders. The result isn’t necessarily outright flattery, but instead blandness with enough positive statements to entice purchases. No one is offended, but on one is any the wiser for having bought and read them.

More blatant are the prizes for product of the show, product of the year, product of the month, product of the week etc. which are as valuable the proverbial claim that the cheque is in the mail. [The correlations of award winners with ads placed with the awarding magazine or the floor space at the awarding exhibition would make a very interesting study.]

Finally, there are those reports that attempt to genuinely explain how a technology or product category works, for what applications it can be applied, what are its costs and benefits , etc. Such reports may also have market shares, forecasts and product assessments but the emphasis will be on providing a handbook or manual for the enterprise contemplating purchasing and implementing or otherwise making use of, or perhaps de-installing, the technology or application in question. Such reports, of great use to an enterprise but only limited use to a vendor, are conspicuous by their scarcity.

The reason there is a paucity of research reports written for enterprise users is that enterprises, by and large, don’t buy research reports. And there are two basic reasons for this.

The first one is a severe over-reaction to the dot com/CRM bubble during which the IT market, especially telcos, bought anything and everything that managed to associate itself with the dot com tag, often with little regard for financial viability. Similarly, many enterprises enthusiastically spent fortunes on software and services that were proclaimed by their vendors to be CRM, often sold by the grey suited, white shirted partners of accounting firms that had hood-winked clients into believing they could offer IT consulting.

The bursting of the CRM bubble was not as spectacular as that of the dot com bubble, but its impact was no less significant. The business community as a whole that had blindly believed all the promises of CRM now blindly disbelieved any of them. The enterprises that threw caution to the wind are now paralysed by it. And those few CRM and other major IT project that boards these days actually do approve have had to jump through NPV, IRR and other financial hoops that are curiously rarely applied to takeovers.

Returning to the subject of this piece, the author is aware of research reports that have attempted to present a balanced assessment of CRM software as a product category and of a number of products in the market. Just how many of the companies that wasted millions attempting to implement CRM software that had actually invested a few thousand buying and making use of one of these reports would be an interesting study, especially if compared with a tally of how many had had an overly-optimistic and flattering forecast from what was purportedly an authoritative research company waved in front of them.

The second reason that research reports are rarely bought by the business community, and it’s also a manifestation of the same frugality, is a notion that because an enterprise is considering spending tens, even hundreds of thousands of Euros on hardware, software and services from a vendor, that that vendor will willingly provide copies of impartially written reference material that provides an unhyped balanced assessment of the product category if not the product itself, copyright notwithstanding.

If only vendors were so magnanimous.

Only through buying impartial research, hiring consultants whose focus is IT, not balance sheets, off-balance sheet joint ventures or demutualisation, or a combination of the two, can enterprises hope to avail themselves of sound advice on IT matters .

Stephen Coates

Stephen Coates is the author of the reports ‘Computer Telephony Integration:from the Internet to the desktop, in Europe, published by Bloor Research and ‘Computer Telephony Integration Marktübersicht published in German by Oxygon GmbH. Both reports cover all aspects of CTI including standards, application integration, applicability to call recording, predictive dialling, audio call recording and internet integration, licence and application development costs, forecasts for future development by product category, unbiased assessments of each of several key vendors and accurate CTI product market shares in each of several national markets. He can be contacted on [email protected] 

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