May 17, 2006

How Analysts Can Help

One of the topics that come up time and again is how industry analysts should be used.  Many people think of us merely as report writers or number crunchers, although there are certainly quite a few companies who understand how to use us and do so.  Analysts often engage with vendors, channel partners, and end users in ways that generally aren’t seen publicly.  We’re involved in a lot of internal work, and a recent article by David Pogue, in his New York Times Circuits Column, that talked about Microsoft and the problems they’ve had with UMPC got me thinking that this is a really good example of where analysts can help.  

The gist of the article is that Microsoft’s UMPC is inappropriately priced, and Pogue puzzles over how this could have happened in a company full of people who ostensibly understand their market and their product.  Pogue concludes that this is a problem of human nature, and he recalls similar experiences in his work life where employees didn’t raise issues that in hindsight they should have done.  When I read this article, the first thing I thought was, well it seems they didn’t talk to the analysts.  I don’t work with the UMPC group in Microsoft, but if this group had run pricing by analysts before launch, I guarantee that flags would have been raised.  

Analysts don’t have a vested interest in a company in the way employees do.  Sure, we have companies we like better than others, and we have products and spaces we like better than others.  But if asked, we will certainly point out what we think is good and bad about a product or program without hesitation and most of us believe that if we’re going to critique, than we’d better have alternative suggestions available.  This is why we argue strongly that analysts should be brought in earlier in the product development and launch cycle than later.  The sooner we can add our insight, the easier it is to make changes and avoid bigger problems down the line.  Analysts certainly can’t know everything – our information for a new product is necessarily limited to what the vendors can tell us – but we can certainly add to the process based on our experiences.

In fairness, Microsoft does engage the analysts in many areas, as do many other companies, and if we do our jobs correctly, most customers will probably never be aware of our impact – we don’t discuss these engagements publicly nor do we write about them except for internal client reports.  But for companies or individuals who aren’t sure how to use analysts, or who think of us as just another branch of PR for outbound information only, this is a good example of how analysts can help.

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