60% plus of all ‘IT spend’ decision making now made by Business Decision Makers – not Support Functions
Recent interactions with our Network of European Senior Executives (CxOs), indicates that circa 60% plus of all ‘IT spend’ decision making is now being made by the main business units – Business Decision Makers and not by the Support Functions and particularly by IT personnel.
This research was supported by recent Gartner research on ‘Follow the Money’, which suggested that the CFO was currently involved in 84% of all IT purchases. Gartner also predicted that:
- 58% of IT projects involve a Business Executive
- By 2016, 80% of projects will involve a Business Executive
- By 2016, 50% of projects will be led by Business Executives
Historically most ITC organisations sell into the IT departments via middle management (not even to the CIO or CTO), the result being that circa 85% of revenues have historically come from within IT. The research suggests that in the future this will change dramatically, especially with Cloud and Mobility purchases, where Senior Executive are making the decisions.
Our CxOs commented that there seems to be a reluctance on the part of the Vendor’s customer facing staff to meet the Business Decision Makers and therefore they miss the opportunity to sell their ‘Value Proposition’ to the person who needs to hear it and hence influence decision making in the Vendor’s favour.
Various reasons for this reluctance were given including:
- Lack of confidence within their own organisation in talking to this level of person
- Not sure how to have a business conversation, without reverting back to their comfort zone and technical speak
- Not sure of the etiquette of the ‘C’ level engagement
- Lack of curiosity leading to inability to analyse the business challenges facing the CxOs and therefore not able to create relevant value statements for the different BDMs they could meet
- Many people are only trained on their Company Product information and not Business Skills.
Whatever the reason, the result is drawn-out sales cycles and poor conversion rates for your organisation.
So the messages is clear, customer face teams need to engage at the business decision making level, if they are to influence the decision making in your favour.