Client Forum – Agfa Healthcare

The Agfa-Gevaert Group is one of the world's leading imaging companies. Agfa develops, manufactures and markets analogue and digital systems, intended mainly for the graphics industry, healthcare, non-destructive testing, micrographics, motion picture and photography markets. HBS Consulting, which is currently working alongside Agfa, spoke to Mr. Dirk De Langhe, Market Research Manager, Agfa Healthcare to discuss Agfa’s approach to the acquisition of business intelligence.

How credible, necessary and appealing do you think that the term of “market research” is for today’s executive?

For today’s executives the understanding of market research is being replaced more and more by an overall understanding of ‘Business Intelligence’. Companies increasingly realise the importance of well-founded knowledge about their own business, competition and their markets, and that there are a large number of potential sources of data and information (including different departments within the organisation and external sources). This information can come from several departments within the organisation such as Marketing, Sales, Technological as well as external sources. In this context, market research is just one aspect feeding data and information into business intelligence. Other aspects that feed data and information into business intelligence are technology intelligence, intelligence about your customers etc., as the following chart demonstrates.

It is important in the process to transform data (quantitative and qualitative) into information (analysed and categorized data) and into Intelligence (actionable information).

How this process is implemented in an organization can be variable, but the key is that all the intelligence that resides in the different departments within an organization will be integrated into a centralized intelligence message. This can be done by a formalized network. A Market Research department can have a centralized role in this.

The task of business intelligence is to bring together all available information and to translate it into actionable intelligence for executives.

At which stage of the life cycle of a product/service do companies tend to think about market research?

This depends on a number of factors: the type of product/service, the type of company and the type of market. There are different kinds of market research methodologies for different stages of the product or services life cycle, and the employed methodology is dependent upon the outcomes expected. For instance, “explorative market screening” would be performed before or at the very beginning of the product or service life cycle. This could serve to explore market opportunities in terms of potential, etc. “Market analysis” is useful to prepare the business plan for a product or service. Market definition, sizing and environment are some of the topics considered. Censuses can be used to measure installed base and market shares, whereas focus groups can be used to test product preferences in a latter phase of the product development. In this manner one could say there is relevance for market research at any stage of the life cycle.

What do you think would be the ideal process based on a cost- effectiveness ratio?

Everything starts with a question that strategically makes sense and needs to be answered. The available resources are not there to answer every question in an organization. This is why we concentrate on the strategically relevant ones. We define this as a “Key Intelligence Topic”.

The process that we use to answer a “Key Intelligence Topic” is simple. In the first step we do a thorough assessment of internal sources such as databases, financial reports, previously purchased market reports or other documents.

In the second step, information gaps are filled with input from networking with other parts or members of the organisation. This is done through a formal network of “Intelligence” workers and specialists. Only if there are still gaps will external commercial sources be addressed.

Once all information is gathered, conclusions can be drawn from the analysis and the data and information can be translated into intelligence.

Do companies think that there is value in market research? If so, what is it?

A good market research project should give you correct qualitative and detailed quantitative data, as well as strategic recommendations. For the quantitative picture of the market, it is also important to have a clear understanding about the methodology how the data has been acquired and to explain what is comprised and what is not comprised in it.

If these conditions are met, the result of the market research can be used to answer a management question and it becomes an important factor for correct management decisions. Selecting market research and consulting companies that can supply reliable (fully reasoned and verifiable), statistically relevant quantitative data is key and is one of the responsibilities of the Market Research department.

In summary, there is only value in market research if the methodology is clearly explained and the numbers are clear enough not to be misinterpreted or misused. HBS Consulting is performing a good job in relation to this.

Overall, in your experience, how useful have market studies so far been for your organisation?

The usefulness of market research depends on its quality as explained above. Impact on business is another story. Business decisions depend on a multitude of factors. Results of a market study would be one of the parameters used to make the business decision. A market study should not be confused with a business plan, but it can be the basis for it.

Commissioning an external company to do a market research study is always studied carefully within our organization. As a result, there has been a fairly low share of studies that were not used due to poor quality or value. Market Research companies each have their specific strengths and weakness. After a while in this job, you start to get experienced in selecting the proper company depending on the project.

In this context, the HBS Consulting multi-client service concept is very appealing. Since the costs of the project are shared, this allows you to do larger scale projects and to get detailed information out of them.

Have they had any impact in strategic decisions? What has been the follow up?

Performing a Market Research is one thing. The aftermath is another story. After the study is done, it requires follow up in terms of internal presentations, meetings and spreading the message. This action must also be stimulated by the management of the organisation in order to make an impact on strategic decisions.

The last decade has seen the use and abuse of the word “consultant” and by default of the need to bring into the company experts to help with the strategies of companies. What is your opinion of the value of strategic consultancies versus that of pure market research?

A Business Intelligence process should be “programmed-in” in an organization. For most of the projects the intelligence should come from within the organization. Sometimes you need expertise or resources that are not available in your organization. In this case consultancy is used.

Market Research will be used more often since quite a lot of the projects require time-intensive work and we do not have always the resources to do the work internally. Another reason to seek support from an external source is if you want to do an independent market study. Some people tend to give you a flavoured answer and some even decide to not participate if you are not independent. This can have a major impact on the outcome and will influence the research results with wrong conclusions as a result.