Analyst Perspectives

We started Ventana Research a decade ago, with the objective of providing the highest quality in business-focused information technology research available. We were particularly interested in offering fact-based market research that would focus on the practical needs of getting the most value from technology in business and IT functions. Since then many of the observations we make and much of the advice we offer are grounded in our benchmark research. In a field that often blurs the distinction between fact and opinion, we stress the former. The quality of our research stems from the methodology and the processes we use in benchmarking organizations’ performance. We believe our approach makes our research highly credible and worthy of your attention.

I suspect that only a relative handful of people who read research from various firms pay close attention to where their findings come from. Being a skeptical, numbers-oriented guy, I am routinely appalled when I look at the demographic data behind some of research I see published especially when I am included in the research. I’ve seen purely finance-focused research surveys (on the financial close, for example) in which the large majority of responses came from individuals who don’t work in finance. Or in the case of issues that mainly affect larger organizations, responses that come mostly from companies with fewer than 100 employees. This sort of research is fundamentally flawed and should not be used for any education or decision making purposes.

It should be common sense that as a rule people who work in IT departments, for example, know little about the specifics of how line-of-business and finance departments function, and vice versa. For that reason, we are careful to qualify those who participate in our research. We ask individuals only questions that they can reasonably be expected to answer knowledgeably or voice opinions rooted in first-hand experience. If our research topic is a significant issue for larger companies, we eliminate the responses from small and midsize businesses before we compile our findings.

At times we like to highlight the differences between groups of participants, which are revealing. For example, we have examined what IT departments think is important to line-of-business users and, in the same research, compared it what line-of-business users say they think is important. As well, we have comprehensively compared and contrasted the requirements and attitudes of small and midsize businesses with those of larger ones.

We refer to our research as “benchmark” because it examines the intersection of organizational functions from business and technology perspectives to identify points of friction and challenges in utilizing information and technology to manage performance. Our benchmark research reveals an organization’s maturity in its ability to execute key functions and can serve as a guide for improvement. Another differentiator of it is the experience we apply to devising our questionnaires that cover each topic comprehensively in a relatively short set of questions. Of course, there’s some value in doing surveys that simply catalog what technologies organizations are using, what issues they face and what plans they may have for the future. But we believe there’s substantially greater value in research such as ours that connects the dots between how companies use information technology in their important functional processes and how successful they are in executing them. Our benchmark research also assesses the maturity of organizations in how they handle these important core processes, and the underlying maturity of their specific people, process, information and technology elements as well as the benefits they achieve or do not achieve. Companies can use this approach to begin assessing how they compare to a benchmark and how they compare to similar companies.

The benchmark research is the foundation of everything we do. Combined with the experience of our team of industry experts, it provides the framework and the facts for our advice, observations and assessment of applications and technology to help organizations improve performance. Sometimes the research reveals facts that contradict the assumptions of conventional wisdom (especially when this wisdom is driven by bias or wishful thinking). For example, to be truly successful, sales and operations planning (S&OP) is supposed to involve a broad spectrum of business functions. Yet our S&OP benchmark showed that only 21 percent of companies involve four or five of the five key functional areas in the planning process – namely executives, manufacturing, operations, finance and sales. Nearly half (45%) involve either none or just one of them. Thus we were able to conclude that one important reason why S&OP initiatives are not achieving their objectives in many companies is a lack of broad participation.

In another example, our recent benchmark research on trends in the financial close revealed that rather than achieving a faster close, companies on average take longer today to complete this core financial function than they did five years ago. We hear companies pay lip service to closing fast, but a majority of them are taking longer than they should (five or six business days) to complete their monthly or quarterly accounting cycle.

I’m writing this partly because I want to make clear why I believe our research and methodology is of the highest quality, why it’s worth your consideration and why spending time participating in our benchmark research is worthwhile. I also bring this up because my email in-box is inundated daily with requests from other analyst organizations to participate in some bit of research. The question sets they send are basic, and not surprisingly, their findings are often unremarkable and at times just wrong, in my judgment. The main purpose for their research, unfortunately, is not to achieve a better understanding of technology users’ needs and practices, but to generate leads that are sold to technology vendors. (Full disclosure: We offer this service to sponsors of our research, but we send along contact information for only those participants who indicate they want to be contacted by a specific technology vendor.)

I have no doubt there are differences in the quality of business-focused IT research offered by different companies. Ventana Research is dedicated to creating and communicating the highest-quality research possible that drives education on best practices and the available avenues for improvement.

Regards,

Robert Kugel – SVP Research