In my Part One posting, I shared commentary on the changing business model of providing industry analyst services catered to global supply chain process and technology selection needs.  Our Part Two posting focused on various implications for Gartner’s integration plans involving AMR Research and what they may mean for your firm’s needs. This last posting on this topical theme will be directed toward my views on the changing forces for obtaining  industry and supply chain advisory content.

Changing Industry and Supply Chain Functional Advisory Models

In the wake of the announced acquisition by Gartner of AMR Research, it becomes ever more diligent for readers to think more about how they wish to receive industry and supply chain functional advisory opinion and actionable advice. Key decisions have many implications to business, revenue, profitability or long-term career success.  These past years of constant change brought on by globalization, the proliferation of the Web, and the structural impacts of a global-wide recession have changed the dynamics of obtaining each of these services. 

Keep in mind that the needs for supply chain experience and competencies have moved way beyond former functional knowledge bases. Whether you role is in planning, procurement, execution or IT, today’s complexity of global supply chain activity require knowledge awareness to financial, product, quality, sales, marketing and IT implications.  Global supply chains now encompass all of these process parameters.

The broader industry analyst world was founded on the basis of providing information technology advisory services solely to the IT community, and was broadened to provide functional and industry oriented coverage.  Key clients come primarily from IT technology and software providers, and as such, there can be a bias toward certain key clients or report sponsors. Ranking of vendor offerings can sometimes bring conflict between presenting an balanced and objective viewpoint vs. the need to not trigger negative reactions from key technology provider clients if not managed well.

Firms such as AMR were founded on the premise of filling a gap, providing advisory services targeted directly to functional manufacturing and supply chain teams. Research coverage was expanded to umbrella ERP and specific industry needs to accommodate the needs of IT. Analysts, such as myself, were recruited based on the depth of both our functional business process as well as broad supply chain software applications implementation experience.

An important differentiator for AMR is the firm’s high-touch model which includes timely response to a client inquiry or direct access to specific analysts.  Specialty conferences in timely global supply chain themes and peer forums focusing on specific community needs are also a part  That in my view is the secret to AMR’s success in supply chain advisory services.  How Gartner ultimately manages this differentiated service model remains a very open question, along with the future cost that Gartner decides to charge for such services. As I pointed out in an earlier posting, gaining both access and individual attention from a Gartner analyst has not been a core strength of Gartner.  While AMR’s senior executive team may look to enjoying the benefits of cashing out, clients will now have to sort out for themselves what change in benefits will flow from the acquisition.

Professional organizations are also reacting to change. Individual professional groups such as APICS (Association for Operations Management), CSCMP (Council of Supply Management Professionals), ISM (Institute for Supply Management) and others were initially established to support the professional development needs of professionals within a specific functional area. APICS for instance, was originally established to umbrella production planning and operations, CSCMP or Council of Logistics Management, its original name, was established for logistics and transportation, and ISM for sourcing and procurement.  Membership costs were often paid for by employers, since valuable education, skill certification and peer networking were provided.

Two significant trends have impacted these professional organizations. First, the same broad integration trends in global supply chain have also impacted the program needs and offerings of these professional groups.  This has resulted in an overlap of topics and services offered by each of these organizations concerning broader supply chain skill certification or training opportunities. APICS today offers a certification involving cross-functional supply chain skills, and ISM, to a limited extent, does the same.  The Supply Chain Council (SCC) provides corporations and firms with certification programs in the Supply Chain Operations Model (SCOR), a comprehensive process mapping and decision methodology that spans global supply chain process areas.  Second, severe cost pressures and layoffs brought about by the effects of the global recession have forced both individuals and corporations to make tough decisions on continuance of professional or specialty organizational sponsorship.  Individual professional membership is often no longer corporate subsidized.  Corporate memberships have unfortunately been also cutback.  The sum total is that many of the professional and industry organizations have experienced some cutbacks in overall revenues and continue to seek out more innovative and cost effective means to accommodate knowledge needs.

Management consulting firms who were solely focused on either strategy or IT integration, have now recognized the critical importance of supply chain processes in business strategy and have added experienced functional consultants.  This includes the usual premier “big-three”, but India based firms such as Infosys, WiPro or Patni now offer focused supply chain and manufacturing consulting. Infosys is reaching out with its own focused supply chain blog.  Supply chain technology vendors who embrace the new power of the web are also stepping-up availability of timely thought leadership.  The past Kinaxis Supply Chain Expert Blog Series brought together a number of noted experts commenting on various timely global supply chain topics.

A new breed of independent Internet blogs has also emerged. I would like to think that independent blogs, this one in particular, have been filling a void in supply chain advisory coverage. 

Advice for Readers

I’ve often noted on this blog that the upcoming era of the “new normal” will test traditional thinking about supply chain processes.  Consolidation, cut-backs and events involving traditional supply chain advisory sources necessitate a need to also re-think about the outlets for obtaining the supply chain advisory services that you need to navigate in the “new normal.” The context must suit your specific personal or business need, whether strategic, tactical or situational in nature.  While your goal is to seek out knowledge, proven experience and insight, the outlets of delivery are under change, whether consolidation or transformational in nature.  Here’s a way you can think about this:

• Categorize your needs as strategic, tactical, situational or individual in scope.  For instance, your organization may need an infusion of new strategic thinking on a supply chain process or assess how an organization’s tactical capabilities compare with proven innovators in that capability.  A supply chain snafu or interruption is situational in time, requiring immediate knowledge and consul. Individuals need a sounding board as to how other functional and industry peers are dealing with a supply chain trend or problem.
•  Seek out the individual person, professional organization, analyst firm, publication or institution offering the best objective insights related to broader or specialized supply chain process topics.  Determine the best means of cost-effective access, particularly in light of today’s requirement of constant mobility and time pressures.  This could be a timely published publication, individualized consulting, one-one-one meeting, group advisory, peer group association or individual skill certification program.
• Determine the most appropriate means to receive information for each categorized need, particularly in the light of what is occurring in the “new normal” . Professional organizations, academic institutions, management consultants and industry analysts and publications are embracing more reach-out through web-based content, newsletters, podcasts, webanars and blogs. Noted experts and industry analysts are morphing toward individual branding vs. broader firm or organizational branding.  Seek these people out by direct access or personalized services.

Supply Chain Matters will continue to be a means to provide timely commentary and insights in broad strategic, tactical and situational supply chain topics because we recognized the need for an alternative outlet.

 Bob Ferrari

Disclosure: Both Infosys Technologies and Kinaxis Inc. provide degrees of paid sponsorship concerning the Supply Chain Matters blog.  Bob Ferrari is also a former employee of industry analyst firms AMR Research and IDC Manufacturing Insights, and is currently the Managing Director of The Ferrari Consulting and Research Group LLC.

In my Part One posting, I shared commentary on the changing business model of providing industry analyst services catered to global supply chain process and technology selection needs.

In this posting I will focus on various implications for Gartner’s integration plans involving AMR Research and what they may mean for your firm’s specific supply chain research needs.

 Gartner’s Integration Plans for AMR

Specifics as to how Gartner will ultimately integrate AMR into its existing business model will not be completely clear until the acquisition agreement is consummated.  A Gartner webcast directed to the AR was held this morning and did shed more aspects to Gartner’s intent going forward.  There are many in the blogsphere who are speculating on how the integration model would evolve. I tend to believe Gartner would not be prudent in deciding to phase-out the AMR brand, and that was clearly stated by two of the Gartner senior executives participating in this mornings briefing.

AMR’s greatest asset is its 45 analysts, the actual core of its intellectual capital. Gartner executives will very clear this morning in stating their firm’s greatest respect for the AMR brand and unmatched research directed at supply chain functional audiences.  In my view, they acknowledged that dedicated research advisory services targeting you, the global supply chain community has definite value.  My takeaway is that at least in this point of time, Gartner’s strategic intent is to operate AMR as a separate boutique-like research company operating under the Gartner umbrella of research services.  The acquisition in essence will allow Gartner to leverage the AMR brand through its globally based sales and services platform. What that will mean to the long-term pricing of these services is an obvious open question.  Supply chain professionals should look to those responsible for industry analyst relations to try to assess long-term pricing implications

The notions of integrating research among Gartner’s existing combined ERP and supply chain practice which currently contains approximately 25 analysts, with AMR’s existing ERP and supply chain analysts was also addressed and somewhat put to rest.  Gartner’s senior vive president of research. Peter Sondergaard stated Gartner’s clear intent is to retain all of AMR’s research analysts and to maintain the AMR research as a separate and distinct research organization. Gartner executives also noted that the AMR office in Boston will remain.

Another area of concern would be AMR’s current coverage of supply chain strategy challenges with specific industries, for instance high tech, consumer electronics or life sciences.  That seems to be very unclear at this point, since Gartner’s industry research model is focused more to the IT community.  .

AMR’s other noted value was its high-touch client model, where clients could gain timely access to an individual analyst. My own experiences as a product marketing executive in dealing with Gartner analysts, or attending a Gartner conference along with thousands of other attendees, are that one-on-one analyst contact is a rather difficult challenge, and when you do get that access, the analyst is often under enormous time pressures to get to the next appointment. Gartner acknowledges this as a best practice, and at least at this point is willing to explore this as a continuing aspect of the AMR business model. Gartner executives also acknowledged the value of AMR’s dedicated supply chain conferences, and flatly stated that the AMR 2010 Spring Supply Chain Conference will continue as planned.  There were additional statements noting that there may be discussion to replicate the dedicated supply chain conference model for European and Asian audiences as well.

Gartner’s press release outlining the acquisition specifically notes that one of the attractions of this deal was the opportunity to both upsell AMR clients with broader Gartner services, and cross-sell Gartner’s existing clients with specialized manufacturing and supply chain services.  This obviously implies maintaining the AMR brand, but I wonder how many existing AMR clients, whether sole AMR or already existing Gartner clients, will take kindly to a barrage of up-sell or cross-sell thrusts. I tend to agree with Lighthouse in the notion that some existing Gartner clients who are AMR clients will initially demand AMR services be bundled and not incremental. Exiting AMR clients, who’s contracts expire in December, may have to determine whether renewal to lock-in the 2010 AMR pricing makes business sense, or wait until the acquisition closes to leverage both services.

Acquisitions are also motivated and fueled with the need to garner additional cost and efficiency savings. One can speculate that back office editorial and office services staff will be targeted for consolidation, and AMR analysts will be asked to do more.  The differences in corporate culture are stark, and take it from me, analysts do not take kindly to compromising the quality of their research or access to clients.  If existing AMR analysts later decide to move on, than the depth of the IP for manufacturing and supply chain may well be compromised.  Gartner had better pay close attention to making this integration a win-win for all.

Again, if your firm is an existing AMR client, or both an AMR and Gartner client, insure that your analyst relations or product marketing teams are paying due attention to how this integration is progressing, and who analyst are reacting to the change.

And as always, you can continue to turn to blogs such as Supply Chain Matters for timely information and viewpoint. In our Part Three posting, we will share comments on evolution of new advisory models.

 Bob Ferrari

Yesterday’s news of the Gartner acquisition of AMR Research has, as expected, generated lots of commentary across the blogsphere.  I penned my initial comments to this announcement yesterday.

The acquisition of AMR Research has a special significance, since AMR has garnered quite a following in our extended community.  Much of the existing commentary I’ve reviewed thus far has been directed at specific communities.  This includes the industry analyst relations community (AR) who’s primary role is to maintain positive relationships with specific industry analysts that provide coverage for their particular’s company’s technology and/or services, as well as the broader audience of technology providers who utilize industry analyst research or opinion as part of their overall product marketing toolset. Some insightful commentary to the AR community can be found on the IIAR, Lighthouse Analyst Relations and Sage Circle blog sites.

The focus of this series of postings will be on the implications to the recipients of industry analyst research, those functional supply chain professionals who have to make well informed business process, management or technology decisions regarding all facets of supply chain. 

I anticipate three implications that would play out as a result of the AMR acquisition:

1. A changing business model of providing industry analyst services catered to global supply chain process and technology selection needs
2. Gartner’s future plans for incorporating AMR’s research agenda and client services
3. The continued evolution of new industry and global supply chain functional advisory services

In this Part One posting I will share my observations on the changing business model that has led up to the AMR acquisition. Parts two and three will elaborate on the two other implications for our community of supply chain professionals.

A Changing Business Model

It is no secret that the business model for providing industry analyst advisory services has been challenged over the past five or so years.  The global economic recession of late has not helped, since research and advisory services unfortunately tend to be placed on lists for discretionary cuts when tough cost cutting decisions need to be made.

AMR has done a superior job of targeting and garnering broad influence from specific manufacturing and supply chain oriented audiences. The attraction of clients to AMR was grounded in the deep influence and insight the firm had in the specific topics related to global supply chain strategy, which was the core of AMR’s founding   The primary reasons that I was attracted to join AMR as a supply chain industry analyst was the down-to-earth maturity and practical experience of its existing analysts and its unique culture.

Today’s AMR go-to-market business model now includes a very high analyst to sales person ratio, the equivalent of one salesperson for every analyst, which insured a very active sales and business development touch model could be wrapped around core research themes.

The open question is whether a deep supply chain focused advisory model will be able to economically exist from an industry analyst firm from here forward.  In my view, there are two other analyst firms that can attempt to fill the void, IDC Manufacturing Insights or ARC Advisory Services.  Since Manufacturing Insights can draw on the deeper pockets and global presence of IDC, it may have the only shot remaining for having a specialized, high-touch model of manufacturing and supply chain analyst services, but a renewed emphasis on Web 2.0 and media based reachout may be in order. One of the rather attractive reach-out services provided by AMR was its weekly podcasts on the key developments of the week.

That leaves the door open for alternative options for catering to specific customer needs.  As Lighthouse Analyst Relations pointed out in its posting- “Every firm merger leaves buyers looking for a new source of second and third opinions.”  When critical decisions need to be made, there is often a need for a well-informed or specialized third-party objective opinion.  From my experience, sometimes a well informed second or even third opinion also helps teams move quicker toward consensus. 

Today, opinions can come from specialized media, conference events, or other web-oriented outlets.  I’m betting that a new business model will evolve that fills this void with an emphasis on one-on-one advisory services. My consulting services will focus more on this void and I’ll comment more in a later posting.

 Bob Ferrari