Ventana Research Analyst Perspectives

Industry Analyst Art or Fiction: Questionable Technology Predictions

Posted by Mark Smith on Oct 8, 2012 11:17:53 AM

I recently wrote about how technology vendors attempt to skew analysts’ and influencers’ research from the edit and review cycles controlled in financial contracts to payment for placed blogs as independent analysis published on the Internet. It is unfortunate that we have to deal with this level of bias. Clearly it is critical for business and IT to identify trusted sources of research and insight that can help determine technology direction. Businesses need not just data but insights from experienced advisors who can provide information with depth and meaning. Unfortunately, a recent pronouncement or prediction from one analyst firm throws a bad light on technology analysts in general.

Most people do not realize that the majority of technology analyst firms focus on serving CIOs and the IT organization. Why is this important? If you want to understand what technologies businesses are not just using but renting and purchasing, you cannot get a true picture from an analyst firm that advises IT exclusively and that does not do research into line-of-business departments. For some reason, though, analyst firms positioned this way nonetheless predict technology trends in business, and with no level of uncertainty. You have to question predictions from analyst firms that use no science or rigor in their research and have no experience in the roles they propose to represent.

The latest example I found of this questionable research is a Gartner prediction that the CMO will spend more on IT than the CIO by 2017. I saw some follow-on review on this prediction, and it appears to be based on a percentage-of-overall-revenue comparison of two different research surveys – a budget spend by IT from one survey compared to different survey on the budget of marketing organizations in the telecommunications industry. The analysis then uses another survey from a university research statistic on percentage of revenue spend on marketing budget to present comparison of the overall percentages. I did not see any specifics on percentage of overall budget for technology from either CIO or CMO being presented, yet we know that that number is significantly higher for a CIO than it is for a CMO, who has a larger portfolio of non IT spend on advertising, events and other services. In my opinion, this prediction is more than suspect.

This skewed comparison has no basis in reality. Comparing companies’ CIOs’ and CMOs’ overall budgets based on varying-sized companies and budgets and then using those numbers to make conclusions about the true subset of technology spending across departments compared to other spending is comparing apples to peanuts to potatoes. If the research analyzed overall spending on and allocation for technology, comparing one company at a time and using specific-sized companies, it would be harder to find fault with the results – and they would likely be different. Those in the industry know that marketing spend percentages differ according to the size and stage of various companies and the markets in which they operate.

This CMO spend prediction needs some research science under it, as it does not appear to be well-crafted nor accurate, and should not attempt to make a prediction about an entire industry of CMO spending more on IT than CIO. In addition, the research statistics should not be used by vendors to support the assertion that CMOs should spend more on IT to keep up with others, since that is utterly inaccurate. I have been a head of marketing and a CMO in the technology industry. I understand technology spending in marketing. My experience alone does not allow me to make projections on the entire CMO and marketing spend, but I do know the basis on which you can and cannot compare research statistics and then project to a prediction. This kind of analysis misstep should have been scrutinized in a research review. It should not be presented as a headline for technology vendors to use to influence or bias the market.

We need better research and science to help our industry, and research firms needs to do a better job policing research statistics before their reports turn into headlines that just shine a bad light on technology analysis.

I, Mark Smith, approve this message and verify that this article was not reviewed, edited, paid for or approved by any technology vendor before it was published.


Mark Smith

CEO & Chief Research Officer

Topics: Sales Performance, Gartner, Research, CIO, Customer & Contact Center, CMO, Technology Spending

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Mark Smith

Written by Mark Smith

Mark is responsible for the overall direction of Ventana Research and drives the global research agenda covering both business and technology areas. He defined the blueprint for Information Management and Performance Management as the linking together of people, processes, information and technology across organizations to drive effective results. Mark is an expert in technology for business from Performance Management, Business Intelligence, Analytics to Information Management across finance, operations and IT. Mark has held CMO, product development and research roles at companies such as SAP, META Group, Oracle and IRI Software. He has experience across major industries including banking, consumer products, food and beverage, insurance, manufacturing, pharmaceutical and retail and consumer services.