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Industry analyst reports are trustworthy, to a point, says expert

Kevin Parker discusses the pros and cons of industry analyst reports and advises when it might be best to trust your own instincts.

Can industry analyst reports be trusted? Are the analysts really in touch with what's going on?

Industry analysts are a necessary evil. They provide a purportedly impartial conduit between vendors and buyers. We love their Quadrants and Waves and Cycles because they distill dense information into manageable morsels that we can consume in our all-too-frantic lives.

They have the perfect business model. Both consumers and providers of information pay for the privilege of their advice. Analyst reports and surveys feature prominently in search results and newsletters. These reports can anoint or kill an idea, change buyer behavior and declare what is fashionable and what is passé.

These reports can anoint or kill an idea, change buyer behavior and declare what is fashionable and what is passé.

Their findings are so powerful that we sometimes forget we actually do a fine job. Releases get out on time (mostly) and meet the needs of the business (mostly) and the quality is great (mostly). Our real world is one of strict budgets, towering demand and fragile human resources, but we still get it done despite our constraints. Of course, if we had more time,money andresources, we would investigate and embrace the latest and greatest tools and methodologies. Our primary focus, however, is keeping the systems up and running.

We need somebody looking over the horizon to tell us where the world is turning next. Who better than industry analysts? However, any future vision should come with a disclaimer that says, "Valid on day of issue only." Getting CTO's and project managers to lift their heads up for a moment and consider alternative strategies is a critical value the analysts bring.

Much of what enterprise application development teams do (80%) is basically just maintenance to keep the lights on, while the remaining 20% pushes forward the new functionality. That 20% on new projects is where the analysts can help the most.

Unlike development teams, analysts spend most of their time researching the latest trends and are, therefore, well-briefed on the directions the industry could take. They move freely among consumers and vendors, collating all their wisdom and distilling it for the rest of us. We need their insights to give us a bird's-eye view of the industry. That said, analysts are still people and are, by nature, subject to their own biases, business pressures and influences.

I'd advise project managers to read the industry analyst reports and grasp the essence of their message but only use the insights that serve the organization. Verify their findings with other sources -- colleagues, user-forums, vendor information -- and prioritize your own common sense over their broad analyses. The newest, trendiest tool might not be the best fit for your particular business problem. In other words, place analysts' reports in the context of your organization and remember that your first priority is to keep the system running. Innovation is important, but it comes second to that.

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Do industry analyst reports help you make business decisions?
In my industry I have always followed what the analysts say and have watched over 14 yrs as they continually overstate and miss the true market insight. The best way to understand is to do your own research and dive in. Most analysts are just scouring the media and Internet for their info, then add some insanely overestimated projections and put it out.