ETL 51: Alan Alper, Manie Bahl and Bob Buday on the ‘Outthinking the Competition’ Study

Transcript: Alan Alper, Manie Bahl and Bob Buday

Bob Buday: Great to have you guys here. We actually began to look at this topic back in November 2024, and so here we are today. We’ve released the findings last month, and this is another way we’re bringing it to the marketplace.

So let me the first of four questions that we agreed to explore: Why did we do this research?

Alan: It’s something that’s been on my mind for many years. It’s been clear to me since I joined Cognizant, which is a global leading IT services vendor, in 2007 as a recovering journalist that what was called thought leadership in the industry was an underappreciated discipline.

In my view, many firms — and I spent a lot of time looking at them — paid lip service to thought leadership. They treated it like a checklist item. They saw their competitors publishing material on topics that were important to them, and they believed they needed to have something to say to remain relevant and top of mind to their target [clients]. But as a result, I think they really under invested and delivered substandard thought leadership assets.

They didn’t really embark on building a solid, rigorous research base. In my travels, I found that only IT services firms with a management consulting pedigree like Accenture and Deloitte and PwC, to some degree, took a more elevated thought leadership research-based track.

They fielded thought leadership initiatives that delivered fact- and evidence-based reports. Others outsourced their thinking to [IT] analyst firms or believed that thought leadership wasn’t as important as advertising or other branding initiatives that were tied to sporting events and industry conferences. 

That really didn’t change over my 15 years in the industry. I was fortunate though, that during my time at Cognizant we were given the latitude and the resources to develop a high-value thought leadership program. In fact, in my humble view, thought leadership was instrumental to helping propel Cognizant’s revenue. The firm grew from $2 billion when I joined to $16 billion in revenue when I left 15 years later.

Now, again, not all of that is attributable to thought leadership. But it was a major, major contributing factor to both revenue growth and recognition by clients, the media and other influencers of the firm’s industry leadership.

Again, I was fortunate that in Cognizant’s management, particularly the senior vice president of marketing and strategy, Malcolm Frank, and the CEO, Frank D’Souza, firmly believed that thought leadership was critical to distinguishing our firm from the growing herds of competitors. And [back then] it was a highly competitive and congested … space. In fact, both those leaders were quite involved in creating and disseminating thought leadership to clients. In fact, Frank would send personal letters to clients on engagements that he served as the executive sponsor, explaining how our thought leadership applied to their business circumstances.

Bob: You had a CEO, Frank De Souza, and you had a head of strategy and marketing, Malcolm Frank, who were full-on advocates of thought leadership, and that was important. We don’t see a lot of that even today. We’ll revisit that in just a bit.

Let me turn to Manie. Manie, why did we do this research?

Thought Leadership as a ‘Door Opener’

Manie Bahl: To add to what Alan said, during our time at Cognizant we saw first-hand how powerful thought leadership could open doors with the clients and prospects. I remember one study we did, a major research report on the future of work that was data heavy, based on surveys of thousands of executives. It explored how digital transformation was reshaping job roles and organizational structures.

We weren’t just talking about technology. We were talking about the human side of transformation, which was extremely important. That aspect resonated deeply with C-suite executives who were grappling with these changes in their companies.

That is the magic of thought leadership. If done right, it’s not a sales pitch. It’s not a brochure. It’s a door opener.

If you look at almost every IT services firm today, their messaging is more or less the same. For instance, “We use AI to engineer digital superiority” and ”We are the most innovative partners.”

More or less, every [IT services] vendor has the same messages. We wanted to understand how the best firms actually stand out, and what are they doing differently, and specifically, the role thought leadership plays in that. That’s what drove us to dig deep through this. We wanted to understand not just whether thought leadership mattered, but how the firms that are winning with it do things differently.

Bob: I thought this would be a great research topic. Before we did a ton of secondary research, I didn’t know that IT services is the largest sector in the $5.4 trillion global IT industry. Telecom used to be as of three or four years ago. Now it’s IT services. To me that says there’s great a need to use thought leadership as the lever for differentiation.

Companies are spending lots of money on the Accentures and the Cognizants and the Virtusas and the IBMs of the world. But it’s getting harder to tell them apart because all sorts of IT services companies have jumped into the fray.

It’s not that hard to stand up a new IT services company today. All you need is an internet connection and people who are willing to work out of their homes. You don’t even need an office.

I also think it’s inherently harder for IT services firms than it is for management consulting firms or pure technology firms to differentiate themselves. At the end of the day, they implement the technology firms’ products, and they often follow on the heels of the management consultants who say, “Here’s how we’re going to reengineer the marketing process.”

It’s harder for IT services firms to distinguish themselves. But we have all known for a long time that it is possible to do – and that when [an IT services firm does it], good things happen to them.

Alan: The mindset of most IT services firms is that they are implementers. They’re tacticians, not strategic thinkers. In a market defined by a lot of sameness and bland marketing messages and positioning, thought leadership is one great way to differentiate your unique expertise.

Bob: There are dozens of IT services firms that can implement Salesforce or ServiceNow. If you’re not looked upon as being an expert in some domain of Salesforce implementations, you’re competing essentially on what price and maybe some good client referrals. But that means you got to get your price down. Being seen in this commodity is not a good place to be, especially as more commodity options are available.

Manie: I think we are on the same page in terms of the mindset shift that is very much required in the [IT services] industry. At the end of the day, you’re delivering services. [Company leaders wonder] what that has to do with thought leadership. They ask, “What do we need to become a thought leader? We’re just delivering technology to organizations.”

I think that’s where we started to understand the mindset shift, which is the biggest challenge, as well as the opportunity for these firms if they get it right.

This was one of our original hypotheses, which we proved: The [IT services] companies that are winning with thought leadership are not only creating brand value, they are also generating new revenue. There is a clear business case.

We explicitly define the “leaders” [among the 300 IT services firms that took the survey] as those whose thought leadership is driving a lot of revenue. The “followers” were [IT services firms] that said thought leadership is not driving any revenue.

Designing the Research

Bob: Let’s talk about how we did the research, Manie. You’re a researcher by heart. How did we design the research?

Manie: We knew from the start that we couldn’t just survey one side of the equation – the IT services side. We designed a two-sided way of looking at the market to see if the sellers and the buyers of IT services were actually on the same page or not.

We fielded two major surveys this spring. The first one went out to 300 IT services firms around the world. We asked them questions about how much they spend on thought leadership, who controls the budget, what processes they use to develop thought leadership content, and how they measure the success. We also asked them how they’re using generative AI [in thought leadership research].

The second survey went to 200 executives across 11 industries — banking, insurance, retail, life sciences, you name it. We asked them what influences their buying decisions, how much time spend reading thought leadership content from IT services firms and what formats they prefer.

The best IT services firms at thought leadership – the firms we called “Leaders,” which were 12% of the 300 IT services firms, told us that their thought leadership drives revenue. That is the bottom line. Then we had the followers: the 16% who said they get zero revenue from their thought leadership programs. The ability to compare extremes and see what separates the winners from the followers was incredible.

The Disconnect Between Buyers and Sellers

Bob: I thought that one of the many good things we did in the research design was taking the same question and asking both on the “sell side” — the IT services companies — and the “buy side,” their clients. That question was about how influential is thought leadership from an IT services firm was on your decision to use this IT services firm or that one, out of a total of nine buying criteria? The results were eye-opening.

Manie: Unless we spoke to the buyer side, we wouldn’t have known how much thought leadership from IT services firms really matters. That is one of the prominent findings from this research: the value that enterprise buyers place on thought leadership the content from IT services firm.

That provided a baseline of what IT services firms must do to gain clients’ mind share and convert it into market share.

Bob: The buyers of IT services firms — the ones that purchase their services, not the private equity firms that buy up whole IT services firms — value thought leadership from IT services firms more than the IT services firms value thought leadership in deciding which it firm to use.

I think has led to a lot of head scratching on our parts about why is that the case. Alan, you led the qualitative research stream. Why don’t you talk about why we did that and what we did well.

Alan: To some degree, the surveys revealed a good chunk of the story. But we needed more color and qualitative interviews. That allows you to understand best practices of IT services firms. We conducted interviews with 20 individuals from a variety of roles, thought leadership program leaders, executives who oversee thought leadership content at firms such as Accenture, Capgemini, Cognizant, the IBM Institute for Business Value, TCS and Virtusa.

We also we spoke with former IT services leaders such as Malcolm Frank at Cognizant and Ben Pring, who held key thought leadership roles at Cognizant and at Gartner, and Vinnie Mirchandani, a former Gartner analyst, author and IT services and software intermediary. Over the years, he has helped buy-side executives make informed technology procurement decisions on IT services and software.

We also spoke with people from the buy side. They gave us an interesting window into their thinking on how thought leadership helped them to determine who was the best partner of choice. And lastly, we spoke to financiers of IT services firms such as people at Recognize Partners and Tercera. We asked them how thought leadership helped to differentiate IT services companies in their portfolio – it helped their portfolio companies stand out from the land the bland and vague marketing and positioning that dominates the space.

We asked questions of the buy side such as how much content they receive every week from companies that are trying to demonstrate their expertise. What percentage of this content do they read on average, what percentage of the content that they read do they believe is of high quality, and how important high-quality content is in helping them and their company address key issues they’re facing?

We asked the IT services companies how much thought leadership content their firm produces each year just to get a sense of how important it was to them and whether their firm really assessed the impact of thought leadership on business activities. Does their company use thought leadership research to spur product or service innovation? And how involved is their senior management in the thought leadership process, from ideation through publication and measurement?

And lastly, the question of the hour is whether their firms are using generative AI on any portion of their thought leadership development, execution and marketing process.

Big Gaps Between Leaders and Followers

Bob: Let’s move on to the third question here. What do you guys think were our three biggest findings?

Manie: I think there were so many good findings. [It is] difficult to pick one. But if I were to pick one, which blew my mind, it was a massive gap in talent and research rigor between Leaders and Followers. Some 78% of Leaders said that they were talent rich or had abundant talent. When we asked the same question to followers, it was only 13%. That’s a six to one difference.

The leading IT services firms at thought leadership also have more rigorous processes for developing content. Nearly 70% have a rigorous or very rigorous process … in research design, data gathering, analysis and structuring narratives. And the same thing you know, when it goes to Followers, only 34% said they had rigorous or very rigorous content development processes.

On top of that, you know, our findings also revealed that Leaders provide extensive or highly extensive guidance to their content teams in research design, and 91% of them do this [vs. only 51% of Followers].

And why does this matter? Just think about it. Research design is where you plant the seeds for groundbreaking insights. And if you don’t get it right, then obviously there’s going to be a problem. If you don’t get your topic properly scoped, formulate strong hypothesis, choose the right methods for gathering data, you are going to end up with very superficial findings that don’t move the needle.

And lastly, what skill did Leaders say they need to improve the most? It’s marketing and distributing their content. Which skills do followers need to improve the most? Developing unique perspectives.

Bob: That tells you … Leaders have the insights dialed in. They know that they are picking the right topics – ones that will resonate with their audience. What they need to get better at is [getting their findings to their audience].

Whereas followers are still struggling to create compelling ideas in the first place. So that tells the entire story. You know how exactly Leaders are winning this game, not only in terms of investments, but in terms of entire research design, in terms of talent and the skill set right, which is extremely important to them.

You guys have heard me say that research design is key part of this. We spent about four months on research design for this study. Yeah, absolutely. I tell people that research design is the step in which big ideas begin or are killed.

It won’t matter what data you collect. You’re not likely to come up with a groundbreaking insight, even one.

Alan, what was your most important and most surprising finding?

Vet the Information From AI

Alan: It’s funny. Manie, I was going to say the exact same thing. Having been a program leader at Cognizant, I could not have survived without having process rigor across the whole thought leadership content development and marketing continuum. I would have failed miserably if I did not have process rigor.

I’m not going to repeat what you had said. I’m just going to amplify it in a couple of areas. You talked about marketing. I was going to focus also on how folks are using generative AI. It seemed somewhat counterintuitive to me that Leader firms are more selective than Followers and where they use generative AI in producing content. Nearly half of the Leaders use AI to gather and summarize secondary research. Less than a third use it in other content development tasks such as identifying topics, creating insights, outlining narratives and writing and editing prose.

Follower firms are more likely than Leader firms to use generative AI in all but nine of the content development tasks that we asked them about. Why was that the case? And may be obvious, but perhaps the Follower firms need more help than the Leaders, and they see generative AI as a means for accelerating the thought leadership development process and keeping pace with Leaders [that] have more resources to deploy in all aspects of thought leadership.

But again, you know my view, and I’m sure, shared by others on this panel, as well as people who are up to date on what’s going on in generative AI. I think that you need to use it responsibly. You need to check facts and assertions. That’s critical. You have to know if your model is pulling knowledge from publicly available sources. It’s critical that you give credit where credit is due.

Sometimes I find that, you know, when I’m using generative AI, it’s pulling stuff from what it calls “research reports.” But when I go look at the source, it’s just somebody’s opinion. So you have to be very careful because you can end up sabotaging what appears on the surface to be groundbreaking thought leadership.

Thought Leadership Heavily Influences Buying Decisions

Bob: The most interesting and surprising finding was on the buyer side – how important thought leadership is in the decision criteria of choosing IT services firms. Thought leadership from IT services firms finished third in importance in buyers’ buying criteria, after market reputation. Services need, firms need great marketing – great brand marketing and customer case studies and testimonials.

But buyers [of IT services] rated thought leadership third on their criteria. That was way above price, which finished at the bottom of our list of nine criteria.

And thought leadership finished way above what the IT analyst firms say about IT services firms — the ratings from Gartner, Forrester and others. And it’s not to say the IT analyst firm ratings are unimportant. Some 69% of the client executives we surveyed said the ratings of the IT analyst firms were highly influential or very highly influential. But that’s 10 percentage points less than those who said thought leadership was highly or very highly influential.

That was a revelation for me. The message for IT services firms is that if you’re competing on price, sooner or later you are going to lose the game. You need to figure out how to gain clients’ mind share. Thought leadership plays a critical role there.

How to Up Your Thought Leadership Game

Let’s go to the fourth and final question here. What do we think are the three most important things that IT services firms need to do if they read the report or they already believe that we have to ratchet up our thought leadership game?

Manie: Invest in primary research and do it with rigor. We found that the firms that are winning with thought leadership are spending 57% of their content budget on research-based content. Firms that are losing spend only 28%. And that’s a massive difference.

Writing a white paper on one or two interviews or secondary research or referring to third party articles [won’t do it].

Primary research that finds patterns across dozens or hundreds of companies – that’s what enterprise buyers of IT services told us they want.  When we asked what they valued in thought leadership content, the top three attributes were relevant topics, statistical evidence from surveys, and case study evidence. So they want to see the data. They want to see the real examples of how companies like theirs are solving problems.

If you want to break through the noise, if you want to open doors to the C suite, you need insights backed by evidence. You need to be able to say, “We surveyed 500 executives and here’s what we found.” That’s the currency in today’s market. Invest in primary research. Don’t look for generic articles or content you can easily develop through ChatGPT or other [generative AI] platforms. You need to invest in authentic, pure thought leadership, which is going to be backed with your research data.

Bob: Are we saying them, “Guys, buyers don’t buy unproven theory …”

Manie: Yes, because everybody else is saying the same thing.

Bob: If a buyer is following the advice [of an IT services firm whose thought leadership publications they read], it can turn into seven- and eight-figure decisions: buying new technology, bringing in an IT services firm and a consulting firm, training their people after the initiative is over. These can be consequential decisions that make or break careers, and make or break whole companies.

Top Management Support is Critical

Alan: Manie and I come from the same background. Doing quality research-based thought leadership and disseminating quality, deep-dive case studies are imperative.

So is top management support. This was backed up by our research: having strong management support fuels the thought leadership programs at leading firms. And in fact, 83% of the Leader firms said that their top management views thought leadership as a competitive advantage, compared to 30% of Follower firms, those that said thought leadership generated no revenue at all.

In my experience, top-down support open doors to the subject matter experts in the organization. It gets interviews with leading clients and prospects. It ultimately helps you to do a better job with with your [thought leadership] program.

Now, getting that support isn’t easy. There are numerous obstacles to overcome. You’ve got skeptical senior leaders who say, “I’m from Missouri; prove to me that thought leadership can deliver a return on investment.”

As we all know, it takes time. It’s not a cause-and-effect thing. It’s a contributor to revenue and recognition in the marketplace. You have to cut through all that and show how thought leadership can influence buying decisions and inform product and service innovation. These are critical.

When I speak to my colleagues in IT services, I say that if you can’t solve that one, you’re in for tough sledding.

Bob: If you do a big study [that generates] groundbreaking results, if the sales force won’t open doors with it, or if the CEO won’t acknowledge it, if the top management team won’t take it to market in conference presentations, you have a nice intellectual asset that you can put on a shelf like this.

Alan: Basically, it takes a village to really make this work.

Bob: One piece of advice I’d given lots of companies over the years is, if your company’s management team is skeptical about the impact of thought leadership, create a piece of thought leadership with the CEO. Make sure it’s good. Do great primary research. Make sure you come up with a counterintuitive finding and have the case examples that prove your novel solution, and have the CEO be the front person in taking it to market.

Until your CEO sees how it can open doors for him personally, and what kind of market reaction he gets, he won’t believe what thought leadership can do. But when you put them in that position and the light bulbs go off, the eyes open up. I imagine this is what happened to Frank D’Souza in the days he ran Cognizant.

Manie: If you work at an IT services firm, this is the report for you. There is a two-minute self-assessment tool that we have developed. Go to the site, take the self-assessment, and see where your firm stands.