Chengappa Kodira co-wrote this post with Brandon Mills.
This post is the fourth in a seven-part series examining top trends that are reshaping the high-tech industry.
Historically, selling IT products and services has been pretty straightforward. All that you had to do was call on the IT department and convince them that your solution satisfied their requirements and budget. Maybe that’s oversimplifying it a bit, but the reality in the B-to-B high-tech industry is that selling has become more complicated because a new decision maker has entered the picture: the business buyer. CIOs and IT organizations are moving to more of an influencer role, while more IT budget control shifts into the hands of business or functional leads.
During a recent webinar “Targeting New Buyers of IT: What Do They Want?” Gartner shared some insights from recent research that confirms this shift. According to CFOs, non-IT business buyers have either full- or partial-budget authority in more than half (51%) of IT investment decisions. Furthermore, 54% of non-IT business leaders said they would be involved in an IT purchase decision in the next 12 months, with 22% saying they would be prominently involved.
While it’s great to acknowledge the emergence of new IT buyers, it’s also important to understand why the shift has occurred, and the implications that it may have on the go-to-market strategy for IT vendors. From our perspective, there are three core drivers that have brought non-IT business leaders into the IT decision-making process:
- Businesses are placing a larger focus on achieving profitability and minimizing operational risks. While the global economy has largely recovered from the Great Recession during the late 2000s, the impact that it has had on how companies operate is still quite visible. The weak business environment intensified the focus on managing expenditures to stabilize the company’s bottom line, causing increased pressure to look for ways to shift traditional IT capital expenditures more toward operating expenses.
- Technology innovation (such as the cloud) has fueled the “as-a-service” economy and made purchasing technology solutions more digestible. Rather than having to purchase IT based on long-term projections of needs, businesses can now purchase just what they need today with the flexibility to easily scale in the future. With cloud-based solutions, many of the traditional technical burdens shift from the business to the IT provider, opening the door for the business and functional leads to become more involved in the decision-making process.
- Technology innovation has led to the consumerization of IT. Business and functional leads see themselves as more tech-savvy based on their personal use of technology, causing them to be more comfortable and proficient in making IT investment decisions. This increase in general digital proficiency has led to the spread of IT into functional units, leading to quasi-IT buyers being embedded more widely in the business. As a result, technology purchasing decisions are increasingly becoming decentralized, and are often done by teams that include both business and IT roles.
But don’t just drop everything and overhaul your go-to-market strategy to focus on engaging business and functional leaders as IT decision makers. You must determine how to optimally engage both IT and business-focused buyers together, not just one or the other.
Most vendors and channel partners are pretty capable when it comes to selling into the IT department. However, they are lagging behind when it comes to evolving their ways to better engage both IT and business/functional buyers. From our perspective, we see leading technology vendors reassessing how they go to market amidst the shift in IT decision makers by asking these core questions:
- Who are the business/functional buyers and influencers involved in the decision-making process for our offerings portfolio?
- For each buyer type, what matters most to them? What are their preferences and needs (content type, channel, etc.) at each stage of the buying journey?
- What is the value proposition of our offerings portfolio to business/functional buyers? Are our offerings designed to meet their needs (pricing, access, usage, etc.)?
- Do we know who these new business/functional buyers are within our target market? Are our current marketing, direct sales and indirect sales resources capable of engaging them?
- Are we capable of executing “team selling” to demonstrate value to both the IT and business decision makers involved in the buying process?
The answers to these questions will vary based on your market and specific industry, but if you’re not asking them today, then your company isn’t changing tomorrow—and your customers may just find someone else to buy from.
Currently, ZS is collecting insights from business leaders regarding the evolving nature of the sales organization. Please share your opinions in this brief survey regarding emerging sales trends as well as your teams’ capabilities and performances.