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The balance of IT purchasing power is shifting away from IT

A recent Cisco study suggests that the balance of power for IT purchase decisions is shifting from IT to users and business department heads. For organisations selling technology this may have substantial implications for lead generation and business development.

So what is driving this change and how should technology providers respond?

Cisco study

A recent study undertaken by Cisco of 4000 IT managers suggests that business managers now fund almost half the IT budgets either through cross charging or purchasing direct. It also suggests that this figure is likely to grow with 59% believing that future IT purchasing authority will be governed by other departments. 

The survey suggests that the role of the corporate IT team is changing from technology fixers to brokers of services. Innovations, such as cloud, enable business managers to understand and access alternative services so that IT has to, in effect, compete with other providers.

Evidence of this effect is already evident from the Cisco survey with nearly half of the IT respondents seeing "rogue" purchasing being undertaken outside of the auspices of IT.

Jo Laking, Cloud Leader from Cisco comments "2014 looks to be the year that lines of business overtake IT departments in terms of spending.  Almost every conceivable business function can now be delivered from cloud as a service, empowering departments to seize control of their own spending instead of waiting for a nod from IT".

Implication for IT solution providers

For those who provide core IT infrastructure or services the change may not be felt for some time. Nevertheless, for anyone providing line of business software or service solutions the change is already apparent. Clearly many have identified the change and adopted a change in strategy, whilst others may still be wondering why sales targets are being missed.

The problem is more significant than just talking to a different set of people. There are more strategic implications that need to be considered such as how you promote and describe what you do, the events you attend, the content you create and the way to present the value, in fact pretty much everything. You may need to retune your entire sales and marketing to be business benefit focused rather than just technology focused.

Are you on target? - A simple test

Find a friendly line manager who would represent a typical purchaser or user of your proposition and get them to look at your website. Then ask them for some honest feedback. Most importantly find out if they are at all excited or interested in what they see to the point where they would want to know more. If they are then you are on track, if not you have your work cut out.

Where do you start?

You need to start with some fundamental background information such as:

  • Which department(s) budget is typically funding the purchase?
  • Who is influencing or making the final purchase decision?
  • Who is initiating the project and researching the options?
  • What are their typical issues and what language or terms would they use to articulate them?
  • What benefits are they therefore seeking?
  • How can you articulate your proposition around the benefits sought?

It doesn't sound like rocket science but how often do you take the time to do a clean rethink on business development? A few minutes walking through this will help to start the process of change and help shape your thinking in terms of how you build your strategy. 

 

 

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