If you are a sourcing manager with a budget, you are probably overwhelmed with the opportunity to spend it on market intelligence.  The industry is as diverse as the categories we source, and comes with indices, blogs, pre-populated commodity reports, detailed supplier profiles, customized “market research” from the low cost country-based firms and a wealth of industry specific and category specific conferences, webex’s and training sessions.

With such a well-developed market and suppliers to meet almost any need, it would appear on the surface that good market intelligence is easy to come by.  But it is not.  The reports provided by the marketplace are still highly generic and based on outdated templates, the conferences are all pay to play, slanted towards the solutions providers willing to spend the most money and primarily focused on selling suppliers, and customized market research from LCC based companies results in blind RFI’s that give the entire profession a bad name, not to mention produces a bad report.

If it sounds like I am bitter – I am!  I have seen customers rely on reports from the leading names in the industry, only to find out the information was too generic to be useful.  As a solution provider, I have been on calls with these firms, and the focus is rarely on understanding my company or the solution we can offer to the marketplace – which is the type of intelligence they like to tout that they provide to their clients.  The focus, instead, is on our company subscribing to their service – and the visibility that will bring us with their customers.  It’s as direct a pay to play conversation as you can have, coming from the independent experts.

Still, many sourcing groups have realized the low value they can get from generalized market research reports, and have called on service providers to perform customized market research to help answer a particular problem or meet a specific need.  I have been on the receiving end of some of this research, with the one of the low cost country based firms calling for a client whose name cannot be disclosed, and asked to provide detailed information about my company in the form of an RFI – without any understanding of the client’s needs or concerns.

In the most recent RFI, I was subjected to several dozen questions that required a written response, followed by a verbal Q&A, another round of written questions and a final verbal Q&A.  At no time was I given the customer name or anything beyond a superficial understanding of the client needs.  In addition, some of the questions made little sense for any given requirement, and had no relevancy to the services we offer.  Now, you may say that it was my choice to answer them at all, and I could have  just declined to participate.  This is true, and next time I probably will, but it still says a lot about the industry and the information these firms are providing to clients.  How is provider information being disseminated and used?  Are we being represented properly?  My suspicion is we are not.

When it comes to useful market intelligence in the sourcing industry, learn about the firms you are engaging and the conferences you go to.  Where do their revenues come from?  Who are their real customers – you or the suppliers you are looking to get information about?    If you are engaging a supplier of customized market research, make sure you understand their methodology for collecting the data, and ask yourself how useful that data can be.  Real time market intelligence isn’t made with magic, it takes real work and strategy.  And a little common sense.
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Joe Payne

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