Guru Spectrum
on Aug 09 by Barry RabkinTags: analysts, consultants
Where does a technology company supporting the insurance industry go for advice? No, this isn’t the GhostBuster refrain.
Technology firms need to know what capabilities insurers need to keep their business running, to make decisions faster, to comply with state, federal and possibly international industry regulations, or report earnings. Insurers may be thinking of enhancing or replacing their existing software capabilities either with solutions from their existing technology providers or from other firms. Or insurers may be thinking of piloting new technologies such as cloud solutions for business functionality or possibly storage opportunities.
Who does the technology company call?
Spectrum
There is a spectrum of advisers in the marketplace able and willing to help technology companies identify the issues, challenges, and trends insurers face so that the technology company can better position their existing products and services or develop new ones.
The spectrum runs from analysts at one end to consultants at the other end. Specifically the options are:
- Analysts – people who focus on a specific technology or industry. (Industry technology analysts are a hybrid model)
- Consultative analysts – people who are primarily analysts but also do consulting
- Analytical consultants – people who are primarily consultants but approach or combine their work with an analyst’s perspective
- Consultants – people who drill down into a situation (whether strategic, tactical, or operational) and working closely with their client, help to bring about change.
Differences?
There is a basic question that you might be asking yourself as you were skimming the four categories of gurus: what is the difference between an analyst and a consultant?
Some of the differences are sprinkled in the short descriptions. But to me, a consultant – whether an analytical consultant or not – is hired to help a client change from whatever condition the firm was in before the engagement to a condition that enables the client to compete more successfully. I realize there is more to being a consultant than that but to me that is the essence of consulting: enable change.
An analyst, specifically one that does not attempt to also consult, is a person that provides objective, independent insight about a specific issue. The client then uses that insight to make better decisions which themselves could then require change (or not).
What do you think is the difference between analysts and consultants? Or are they really the same animal?
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Bob Leonard said:
Barry,
I agree with your assessment. I would add that analysts (e.g. Ellen Carney at Forrester) work more in the macro space, and with large vendors. The large vendors have in-house vertical industry experts who are more tactical and often perform sales support activities. Smaller vendors might engage a consultant like you to perform the change agent role that you describe. I’m on the extreme far end of the spectrum (or maybe not included at all). I can be a change agent, but that’s more a by product of what I do. I work with smaller vendors and actually execute their marketing strategies and perform sales support activities similar to the internal vertical industry specialists at large vendor companies.
insurancetechnologyanalyst said:
My own experience (from being a management consultant and industry analyst) includes working at both the macro (with large technology firms) and micro (with smaller technology firms) levels. In particular, I have found research efforts that focus on how the instech space is changing or profiling up-and-coming instech firms to be very interesting and satisfying.
As you mention, the large technology firms have vertical experts with experience in the tactical and/or operational aspects but not strategic. I think that is one reason technology firms should engage external advisors – particularly people who remain objective and are not ‘yes’ advisors. Strategy can be harder for a technology firm’s own staff because they don’t or can’t look in the mirror and see their own faults.
Bob Leonard said:
There is something to be said for an external view point. Sometimes people inside can’t see the forest for the trees, and sometimes they know what the problems are, but can’t say because it wouldn’t be a good career move.
Larry Chait said:
Where does a technology company supporting the insurance industry go for advice? Clearly, the answer is: It depends.
On what does it depend, you ask? I think the starting point must be not whether they go to an analyst or a consultant, but rather what question do they have or what problem are they trying to solve. Based on the question/problem, they should then go to whomever they believe can best shed light on it.
So, for example, if a tech company is trying to figure out what’s the next wave – the next technology in which they should invest – they should probably talk to analysts who track technologies in insurance and have insight into this issue, AND consultants who deal with multiple insurance companies and thus have an insight into multiple CIOs’ thinking, AND two groups left out of your original question: CIOs and tech analysts in insurance companies, AND their technology partners and competitors.
Thus, I don’t see it as an either/or, and I don’t see the universe for advise limited to just consultants and analysts. Again, what’s the question/problem, and who are the best people I can imagine to help me find a way through it?
robertbeverly said:
If a consultant lacked the competencies of an analyst as described above, he would have a hard time as a consultant. I expect a consultant to formulate insights to answer a question such as, “what might be wrong here?” If companies hire consultants only when they know exactly what they want done, are they really hiring “implementers who also might consult?” From my observations, some consultants don’t execute or implement anything; they just have insights and deliver recommendations to the client. Are they really “analysts who also recommend things” calling themselves consultants for lack of a better term?
I’m not sure all these terms can be so tightly defined in practice. Ultimately, I would vote that most in these fields are chimeras with some combination of analytical, consultative, executive, and implement-ive (new word) skills; and what they call themselves is of less import that what they can do for their clients.
insurancetechnologyanalyst said:
I agree that management consultants need a mix of the skills you discuss … but the essence of management consulting is enabling change. That could be sharpening or defining strategy and tactics or improving or redefining business operations. But at essence, consulting is enabling the client to have a different competitive posture in the industry – or their markets of choice – after the engagement.
The essence of an industry analyst is providing a deeper – and objective – understanding of an issue. That issue might be a competitive situation, customer profiles, strategic intent of a specific corporation, … or whatever. But after the analyst is finished providing that deeper understanding, the client will not necessarily change their competitive posture. The client will have improved their knowledge of the situation and then choose to act – or not – on that knowledge.