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Ethics and Independence Among Industry Analysts

There’s been a bit of a discussion going around lately on ethics in the industry analyst sector.

I understand why the ‘pay for play’ model can seem an attractive option for smaller companies looking to generate business but firms that go down this route always tend to get found out. Their credibility is eroded, they cannot attract quality analysts and their business slowly disappears.

Any analyst firm which values its long-term reputation in the market has to ensure that its research is independent (and also seen to be independent: for instance, I’d argue that there’s a greater need for analyst firms which produce sponsored research to be very open about their methodologies so they avoid any suggestion of conflict of interest).

However we do need to be realistic about the economics of the analyst business. Most analyst firms couldn’t exist without vendor cash – be it via sponsored research, consulting projects or speaking engagements.

And so long as analyst firms clearly communicate who is sponsoring their work, I’m fine with that. After all, the old principle of “caveat emptor” must always apply.

But what about:

  • the UK company that publishes a company profile – but gives no indication that the piece was commissioned by the vendor (and for which the vendor was effectively given copy approval)
  • the analyst that writes blog posts promoting a project that his consultancy is involved in – without disclosing his connection
  • the division of a large group that prioritises briefings based on the likelihood of selling reprints of the resulting company profile
  • the analysts that use a briefing as an opportunity to pitch their own services
  • the global company that says its analysts are more likely to recommend vendor clients to prospective buyers (because the analysts know clients better than those that are non-clients)
  • the vertical firm that refuses to take briefings with non-clients because it’s so busy doing consulting work it can only handle briefing requests from clients
  • and what about this experience highlighted by the corporate AR team at HP?

Thankfully these kinds of behaviour are limited and the examples are few and far between. But it does still happen.

As analyst relations professionals, we face a challenge. What responsibility do we have for ensuring these practices are stamped out? Are we proactive or do we just refuse to support them? Do we have a ‘quiet word’ in the right ear? Do we out the bad apples in public?

Or do we turn a blind eye – because actually it’s good to know that you can sometimes bung a few quid to an analyst and get something positive written-up about the company we work for?

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Gartner improves the vendor briefing process

In the most recent Gartner Analyst Relations Newsletter, Peter Kalinowski explains how the Vendor
Briefings
process has been simplified based on feedback received from AR professionals.

Amongst other things, all analysts now have access to the materials and the scheduling is easier. Also, vendors are getting a single point of contact -a welcome return to the client relationship model that META Group used.

This is a great improvement however some other questions like materials under NDA and access by Gartner’s consultants have been raised at the last IIAR Forum and would merit being clarified.

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Building the future of DARA and IIAR

Today, the German Analyst Relations Working Group, (Deutscher Analyst Relations Arbeitskreis, DARA) will meet for the first time this year (and for the 9th time since it was founded) at Fujitsu Siemens Computers‘ offices in Munich. It is interesting to see that more German-speaking professionals from technology companies are becoming interested in being a part in an organization that helps AR professionals network. One point we look forward to discuss will be the collaboration between DARA and the IIAR. Both organizations have made tremendous progress in the last few months:

  • Not only has the IIAR won new members, it has also helped to raise the profile of Analyst Relations as a profession and communications activity within the IT and telco sector. The IIAR has moved into the league of internationally recognized organizations which add value for analyst relations experts.
  • The DARA is just about to publish its book, “Industry Analyst Relations in Deutschland” and has produced a paper on ethical behavior in IAR. It has further developed its membership base and has become the most recognized German network for analyst relations professionals in
    the area.

What will be the role of DARA in the future? While the IIAR is an international organization, hosting guest speakers such as Gartner’s Aaron Yaverski, GVP High Tech Product Management and Andrew Rosenblatt, Product Development, the DARA could regularly contribute new pieces of
“local knowledge” to the AR community. For example, one guest speaker at the next DARA forum will be the Managing Director of Business Application Research Center, BARC, a growing Germany-based research house, mainly focussing on BI. Many DARA members are interested in learning more about this research firm and look forward to the session.

Simultaneously, the German forums will also transfer international knowledge to German AR professionals. The DARA will increasingly seek to host analysts from abroad, in person or via web conference: For example, Redmonk‘s James Governor will also present as a guest speaker at the forum.Of course, there is also the possibility to bring members from both locations together to organize an exchange of ideas and best practices. Such a forum would make a wide range of opportunities available and I think many of us believe something like this would be well worth a try.

In my opinion, one of the most important questions is where the AR community will see the most significant synergies between DARA and IIAR and how we can bridge any geographical distances better. A first step is already made: Two of the IIAR board members are German analyst relations professionals. Reflecting on the feedback from many IIAR members, I get the impression that these board members will have the remarkable opportunity to help connect both organizations better. They could facilitate further progress on the road to a global AR community.

I am interested in other views on this matter -please feel free to comment on this post.

Disclaimer: The views expressed on this blog post are my own and do not necessarily reflect the views of HFN Analyst Relations or other members of the IIAR. We can’t be held liable for any unintentional misrepresentation on this post but are happy to correct any mistakes or nonconformities.

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