My colleague Enrico Camerinelli helped a number of his former clients at META Group to calculate their return on investment from IT purchases they had made. At the Gartner Symposium in Orlando next month, Lighthouse will be introducing Enrico’s methodology for calculating the value of analyst relations.
Readers of Analyst Equity already understand the extent by which large enterprises support their IT investments strategies through IT research (ITR) and advisory services. At the same time, enterprise software vendors and consulting firms rely on the indications and direction provided by ITR analysts to shape their go-to-market strategy in accordance with the latest research findings.
While- in principle- the ITR services are engineered and deployed to add value to the users’ and vendors’ operations, in reality very little has been done so far to show the nature of such value. This lack of perspective slows down the ability of Analyst Relations (AR) representatives to foster the use of external advisory services within their own organizations. In short, many vendors don’t know whether the analyst firms are giving them value for money.
Furthermore, analyst AR managers don’t know whether they should be spending less on research and more on advisory days, or consulting projects — or simply using the money to fund their own research and AR programmes. In a period like this when research spending is probabaly dipping, that means, it’s not only analysts’ prospective clients who ask for tangible indicators to positively influence the decision process. It’s also existing clients that repeatedly question the value received so far, and demand clear evidence before progressing in talks for additional investments in analysts services, even when not negotiating on basic contract renewals.
This brings us to Enrico’s notion of ROeI. Today very few companies are willing to spend in IT (as it was in the past “internet days”) for the sake of adopting new technologies and new functionalities. The usual question now focuses on what value the company has obtained from existing investments. From ROI (In practice, return on new investment) we are moving to the concept of Return on Existing Investment (ROeI).
This is a great opportunity for AR managers, who can use an easy-to-use model that categorizes the available ITR deliverables and ranks them according to the effective spend compared to the expected results.
On October 11, Enrico and I will be leading a teleconference to introduce our clients to the concepts of the AR ROeI model, to the Alignment and Business Impact Matrix, and to the notions of AR’s
· Return on Credibility
· Return on Visibility
· Return on Operations
· Return on Time.
At the Orlando and Cannes Symposium, we’ll be offering complementary assessments to firms that want to experiment with this methodology, discover their results and see how Lighthouse AR is able to provide a practical answer to key AR issues through the use of AR ROeI services. If you have half an hour spare at Symposium, or to meet us in London or Milan one day, just contact us.