IT Decision Makers Survey Gives Insight To New Procurement Strategies

IT Decision Makers Survey Gives Insight To New Procurement Strategies

IT Decision Makers Survey Gives Insight to New Procurement Strategies

The IT industry is undergoing a fundamental shift in the way companies buy IT solutions. This shift is driven by three trends: The decision-making process is being influenced by a diverse and larger set of individuals within the company, these individuals are increasingly tech savvy and self-educated, and easy-to-buy, cloud-based options are gaining market share.

This is affecting the way IT vendors compete, forcing them to alter their sales and marketing strategy. Our firm, L.E.K. Consulting, the global management consultancy, conducted a study of 228 IT decision makers across all verticals and company sizes in the U.S. In a recently published white paper called “Cloud Disturbance: How IT Vendors Can Succeed In a Time of Shifting Buying Trends,” we reveal the silver lining to the change and offer advice to IT vendors looking to capitalize on this movement in the industry.

IT-Strategy

(Image Source: Shutterstock)

Many People to Please

Our first insight from the survey was that purchases-by-committee are becoming common place. An average of 11-13 people are now involved in the IT purchase and decision-making process. This results in a lengthier buying process to satisfy the desires of multiple stakeholders.

The People are Tech Savvy and Self-Educated

Making the IT sales rep’s job even more difficult, these de facto purchasing committees now consist of self-educated buyers that form early opinions on technologies and vendors with minimal direct input from the vendor or the channel. Instead, they rely on company websites, online communities and Google search results to self-educate and help develop their preferences. Value-added resellers (VARs) continue to play a role in the customer discovery and purchase-decision process, but their importance is diminishing. While VARs are engaged nearly 80% of the time in the procurement decision process, the study found that they are consulted late in the process and are influencing purchase decisions less and less.

In Comes the Cloud

Many purchasers—especially the end users who need software to power the processes that impact them directly—are frustrated by purchases-by-committee. These individuals are looking for a way out of the long process. To alleviate this frustration, these buyers often turn to cloud-based options for a relatively cheap and easy transition to third party, internet-based hosts.

The benefits of cloud deployment are well-known and have certainly been hyped: improved disaster recovery, lower upfront capital requirements, flexibility to add or reduce seats, and reduced requirement for in-house IT staff. But our research shows that vendors still need to address the negative perceptions associated with cloud-based services—privacy and security, lack of internal control, high total cost ownership, and WAN reliability.

The average preference for pure cloud services (versus on-premise and on-premise managed services) is still less than 20% and varies dramatically by software application and customer profile. The applications most preferred for deployment in the cloud are audio conferencing, web collaboration and CRM, while the one that IT decision makers least prefer to access via the cloud is ERP.

Three Solutions for IT Vendors

Stop selling and start helping. An omnichannel marketing strategy is now a necessity, including a strong online presence (website, online communities, SEO, etc.) But vendors must change their mindset from “sell at all costs” to “education first and foremost,” and prioritize content marketing over advertising and direct sales in most instances. We advise vendors to focus on the value proposition of the product as it pertains to each stakeholder involved in the decision-making process.

Engage with and empower the channel. VARs may be involved in 80% of the vendor selection decisions, but many are not involved early on when the foundation is laid for the final vendor choice. VARs need to entrench themselves in this process, understanding each customer’s IT strategy. Vendors should have programs that enable and motivate VAR partners to build expertise and stand-alone capability from local marketing to technical sales, integration, execution and customer support.

Ensure you have a robust cloud solution. Our research shows that the cloud won’t be right for every customer at this point, but having a solution for those customers for whom the cloud presents a compelling business case will be essential. IT vendors need to provide cloud solutions that more seamlessly integrate with enterprise IT environments, and then back their solutions by addressing the concerns of conservative large-enterprise buyers. Success in some sectors may require a hybrid approach that combines the benefits and capabilities of traditional on-premise solutions with multi-tenant cloud capabilities in a single system.

If IT vendors put these strategies into play, they will be able to exploit the shift in the way companies procure IT solutions.

By Aaron Smith/Mark Arman

Authors Aaron Smith and Mark Arman are located in L.E.K. Consulting’s San Francisco Office and can be reached by e-mailing A.Smith@lek.com or M.Arman@lek.com

About CloudTweaks

Established in 2009, CloudTweaks is recognized as one of the leading authorities in connected technology information and services.

We embrace and instill thought leadership insights, relevant and timely news related stories, unbiased benchmark reporting as well as offer green/cleantech learning and consultive services around the world.

Our vision is to create awareness and to help find innovative ways to connect our planet in a positive eco-friendly manner.

In the meantime, you may connect with CloudTweaks by following and sharing our resources.

View All Articles

Sorry, comments are closed for this post.

IoT & Predictive Analytics In Healthcare

IoT & Predictive Analytics In Healthcare

IoT & Predictive Analytics In a report by Grand View Research Inc., it’s predicted that the global Internet of Things (IoT) healthcare market will reach nearly $410 billion by 2022, with mobile penetration, software automation, and innovation medical devices promising rapid testing, greater accuracy, portability, and user-friendliness. Chronic diseases such as obesity, diabetes, heart failure,…

What Do You Do With A Drunken Sailor? Look To The Cloud

What Do You Do With A Drunken Sailor? Look To The Cloud

Saferide App Petty officer Michael Daigle of the US Navy has rolled out an app to curb drunken driving in the Navy ranks. His Saferide ride-sharing service runs on Voxox’s Cloud Phone service which costs just $15 a month and is popular among US Service members abroad, where mobile phones are not permitted for use…

Red Hat Offers Container Native Persistent Storage for Linux Containers

Red Hat Offers Container Native Persistent Storage for Linux Containers

Red Hat Offers Container Storage Latest Red Hat Gluster Storage release enables greater agility and efficiency for OpenShift developers deploying application containers in production SAN FRANCISCO – RED HAT SUMMIT – June 28, 2016 – Red Hat, Inc. (NYSE: RHT), the world’s leading provider of open source solutions, today announced new storage innovations designed to enable developers to…

Controversial Chinese Cybersecurity Law Under Review Again

Controversial Chinese Cybersecurity Law Under Review Again

Cybersecurity Law BEIJING. The National People’s Congress, the equivalence of the Chinese Parliament, moved forward in drafting a second version of a controversial cybersecurity law first introduced almost a year ago. This means the law is thought to be closer to passing and will bring greater censorship for both foreign and domestic citizens and businesses.…

How You Can Improve Customer Experience With Fast Data Analytics

How You Can Improve Customer Experience With Fast Data Analytics

Fast Data Analytics In today’s constantly connected world, customers expect more than ever before from the companies they do business with. With the emergence of big data, businesses have been able to better meet and exceed customer expectations thanks to analytics and data science. However, the role of data in your business’ success doesn’t end…

Unusual Clandestine Cloud Data Centre Service Locations

Unusual Clandestine Cloud Data Centre Service Locations

Unusual Clandestine Cloud Data Centre Service Locations Everyone knows what the cloud is, but does everybody know where the cloud is? We try to answer that as we look at some of the most unusual data centre locations in the world. Under the Eyes of a Deity Deep beneath the famous Uspenski Cathedral in the…

Who’s Who In The Booming World Of Data Science

Who’s Who In The Booming World Of Data Science

The World of Data Science The nature of work and business in today’s super-connected world means that every second of every day, the world produces an astonishing amount of data. Consider some of these statistics; every minute, Facebook users share nearly 2.5 million pieces of content, YouTube users upload over 72 hours of content, Apple…

Cost of the Cloud: Is It Really Worth It?

Cost of the Cloud: Is It Really Worth It?

Cost of the Cloud Cloud computing is more than just another storage tier. Imagine if you’re able to scale up 10x just to handle seasonal volumes or rely on a true disaster-recovery solution without upfront capital. Although the pay-as-you-go pricing model of cloud computing makes it a noticeable expense, it’s the only solution for many…

Protecting Devices From Data Breach: Identity of Things (IDoT)

Protecting Devices From Data Breach: Identity of Things (IDoT)

How to Identify and Authenticate in the Expanding IoT Ecosystem It is a necessity to protect IoT devices and their associated data. As the IoT ecosystem continues to expand, the need to create an identity to newly-connected things is becoming increasingly crucial. These ‘things’ can include anything from basic sensors and gateways to industrial controls…

The Future Of Work: What Cloud Technology Has Allowed Us To Do Better

The Future Of Work: What Cloud Technology Has Allowed Us To Do Better

What Cloud Technology Has Allowed Us to Do Better The cloud has made our working lives easier, with everything from virtually unlimited email storage to access-from-anywhere enterprise resource planning (ERP) systems. It’s no wonder the 2013 cloud computing research IDG survey revealed at least 84 percent of the companies surveyed run at least one cloud-based application.…

Cloud Computing Checklist For Startups

Cloud Computing Checklist For Startups

Checklist For Startups  There are many people who aspire to do great things in this world and see new technologies such as Cloud computing and Internet of Things as a tremendous offering to help bridge and showcase their ideas. The Time Is Now This is a perfect time for highly ambitious startups to make some…

How Your Startup Can Benefit From Cloud Computing And Growth Hacking

How Your Startup Can Benefit From Cloud Computing And Growth Hacking

Ambitious Startups An oft-quoted statistic, 50% of new businesses fail within five years. And the culling of startups is even more dramatic, with an estimated nine out of ten folding. But to quote Steve Jobs, “I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.” So while…