Navigating the Crossroads of Change

As usual, GRIT’s Business Outlook is an information treasure trove that can shape our strategies for the next year in the insights and analytics sector. We’re at a crucial crossroads, and several key implications jump out at us that we think industry leaders should pay close attention to. 

Technology Investment: A Must, Not a Nice-to-Have

Foremost is the ongoing importance of technology spending. Research firms that leaned into technological solutions during the pandemic are reaping significant rewards, but the playing field isn’t level. While some suppliers, particularly data analytics, flourish thanks to tech investments, others, like full-service providers, are lagging. Clearly, investing in the right technology has become essential rather than optional. Implementing tools that boost efficiency and deliver actionable insights is key, and failure to adapt risks being overshadowed by more technologically savvy competitors.

Rethinking Research Budgets

Another critical point is the shift in research spending habits. After a high of 46% reported research budget increases in 2022, only 31% report increases now, so it’s time to rethink your resource allocation. Feeling the financial pinch, clients are splitting their spending between technology and research. Leaning too heavily in one direction risks missing out on key insights. Striking a balance between technology and staffing will be crucial to meet both immediate needs and long-term goals.

Staffing: A Call for Strategic Optimization

Struggling to balance tight budgets with performance expectations, full-service research firms’ personnel cuts are a wake-up call. Instead of hiring more people, why not optimize talent you already have? To significantly enhance your existing team’s effectiveness, encourage cross-training and foster a culture of adaptability. This promotes skill development and improves employee engagement, increasing productivity without straining to add hires.

Outsourcing

The rise in outsourcing—particularly in data analytics and technology—reflects a growing recognition of the need for specialized skills beyond in-house capabilities. It might be time to reassess your outsourcing strategy. Look for reliable partners who can enhance your offerings and complement your strengths. A robust network of strategic collaborators can set you apart from competitors who continue to rely on outdated methods.

Opportunities and Challenges Await

The coming year is sure to bring both opportunities and challenges. Declining revenues and workforce reductions will lead to heightened competition, which could trigger a wave of consolidation. Smaller firms may struggle, creating openings for strategic partnerships or acquisitions.

Clients are increasingly tech-savvy, more demanding of research partners, and seeking real-time insights and integrated data solutions. Falling short risks losing clients, so meet with them, understand their priorities, and explore partnering to develop new solutions, some of which may be the foundation for strategic collaborations. 

Strategies for Effective Growth

Consider focusing on a few key strategies:

1. Make Technology Your Ally: Invest not just in software, but also in training.

2. Focus on Skills, Not Just Headcount: Prioritize skill development and cross-training to boost retention and make the most of existing talent while driving productivity.

3. Forge Strategic Partnerships: Partner with organizations that excel in areas like analytics or technology to expand your offerings and deliver greater value.

By embracing technology, reevaluating budgets, leveraging your team’s skills, and forging strategic partnerships, your organization can thrive in this dynamic environment.