"Reliable is no longer realistic"

How reliable is current business / market intelligence?

Global providers have earned a lot of credit before the financial crisis and economic meltdown started. Projections about sectors and industries were often very realistic and producers used this guidance to the top.

Analyzing markets in a downturn is a different ball game. First analysts have to get rid off their wrong projections. What was predicted in 2007 did not happen in 2008 and in 2009 etc.

Secondly adapting to more challenging market conditions must not be underestimated. This will not lead to better advises while clients should demand more values for their (high) fees.

Third and perhaps most important information providers can no longer rely on their historical performance. Without changing these promises to clients it would be harder to keep them.


Was it really quality info or just benefiting friendly market conditions?

Without doubt experience counts. Explaining an industry and the trends or competition and pricing can only be done after years of study and involvement.

Information providers could claim therefore for years their knowledge and valuable analyzes. Selling it for large amounts was not difficult as budgets were available and in an upturn there is less doubt (worry / fear) about the outcome.

Until two years ago. Without having to study all predictions made in 2007 or before half 2008 it can be said that 99% did not happen due to the fast and unexpected turnaround in global markets.

Exceptions were hard to find and therefore a lack of quality information is nowadays a reality.


What is left of the value of current industrial analyzes?

While facing difficulties in most markets and countries up till now the past two years many information providers continued with making wrong predictions.

It seems the strategy of pleasing customers with positive information about their industry, even though at much lower levels than before 2008, was for many the only or best option.

Reports about recoveries in all sectors are floating to the markets and many use historical excuses for explaining their projections.

Instead of becoming more conservative most remain focused on what the client would like to hear and not about the very small chance of a fast recovery.


As historical performance is no longer a guarantee for offering realistic future information, what should information providers do?

All main information providers claim to be reliable and being the best alternative for their clients. But do they learn from this set back and can they adjust to keep the client on board?

Information providers must stop selling their past performance. Until now they got away with it as most clients kept buying information.

But what happens when this buying dries up completely due to the ongoing budget cuts inside companies?

When information providers cannot adjust and offer a better service, becoming another value for their client than only delivering the same wrong conclusions it will be a tough short term future.

Conclusion:

There are too many similar information providers (wrong). Too many offer the same reports about a certain sector or industry but instead of being critical they remain positive or at the save side.

Probably out of fear of losing the client. Some still can afford to warn their client that what is ahead is not delivering same profits as 2-5 years ago. Would it not be normal that current analyzes are less positive to make them more acceptable or at least more understandable?

Here lays the difference between quality and price/value. Consolidation is good for every industry and also for information providers. From large providers to small consultancies there will be tough times ahead or already facing.

Changing the core business to improve it is best to do. Offering a better service including discounts could work for now. But what really would help is stop selling unnecessarily optimistic expectations which finally do not occur.

At the end that only creates false hope, intimidation and wrong assessments. It will not help any company reaching final goals. Reliability based on only analyzes is no longer realistic in this business climate.