Insights into IT Expenditures and IT Decision Making
B2B Sales and Marketing teams spend inordinate amounts of time trying to understand and target IT expenditures and IT decision making to optimize their go to market plans. Any and all insights into how IT budgets are assembled and how IT technology purchases are made will directly and positively impact marketing ROI.
IDG Enterprise conducted a study entitled “Role & Influence of the Technology Decision Maker” spanning over 1,200 responses. Highlighted below are recent research findings into IT expenditures & IT decision making with relevance to B2B technology go-to-market strategy and execution.
When survey respondents were asked to indicate the minimum dollar amount required for their signature for IT expenditures, the results were:
IT Expenditures and IT Decision Making – Sign-off Required IT Expenditures
- Executive IT 41%
- IT Management 13%
- IT Professionals 6%
Survey respondents were then asked to indicate whether a purchase of less than $10,000 required their signature for IT expenditures, the findings were:
- 14% of Executive responded Yes
- 19% of IT Management
- 13% of IT Professionals
When survey respondents were asked to indicate whether a purchase of $10,000 – $99,999 required their signature for IT expenditures, the results were:
- 16% of IT answered Yes
- 13% of IT Management
- 6& of IT Professionals
When survey respondents were asked to indicate whether a purchase of $100,000 – $199,999 required their signature for IT expenditures, the results were:
- 8% of IT Management responded Yes
- 5% of IT
- 2% of IT Professionals
When survey respondents were asked to indicate whether a purchase of $200,000+ required their signature for IT expenditures, the results were:
- 7% of IT answered Yes
- 5% of IT Management
- 3% of IT Professionals
26% of total respondents reported that all IT expenditures require their signature, regardless of purchase size.
The average minimum sign-off on IT expenditures continues to increase:
- 2011 $61,816
- 2012 $58177
- 2014 $63,248
- 2015 $67,004
When survey respondents were asked if they find cost savings within their existing technology budget, are they able to reallocate those funds on a discretionary basis (as opposed to losing the budget), the responses were:
IT Expenditures and IT Decision Making – Flexibility to Reallocate Funds
- 58% of respondents communicated that they do have the flexibility to reallocate funds for IT expenditures
- 22% stated Not Applicable
- 19% answered No
Decomposing the flexibility to reallocate funds
Executive IT
- 72%of respondents stated that they do have the flexibility to reallocate funds for IT expenditures
- 16% stated Not Applicable
- 12% answered No
Business Management
- 50%of respondents communicated that they do have the flexibility to reallocate funds for IT expenditures
- 28% stated Not Applicable
- 22% answered No
IT Management
- 54%of respondents stated that they do have the flexibility to reallocate funds for IT expenditures
- 25% answered No
- 21% stated Not Applicable
IT Professional
- 49%of respondents communicated that this choice was Not Applicable for them
- 29% responded Yes
- 22% answered No
IT Expenditures and IT Decision Making – Enterprise Purchase Cycles
Respondents were asked to recall historical IT purchases made from a vendor with whom they were already familiar with or with whom they had experience, compared to the purchase cycle from an unfamiliar vendor, and to communicate the average purchase cycle (in terms of time):
Enterprise Purchase Cycle Longer
- For companies with less than 1,,000 employees and that were familiar with a vendor, the average purchase cycle was 3 months
- For companies with more than 1,000 employees and that were familiar with a vendor, the average purchase cycle was 4 months
- For companies with less than 1,000 employees and that were unfamiliar with a vendor, the average purchase cycle was 6 months
- For companies with more than 1,000 employees and that were unfamiliar with a vendor, the average purchase cycle was 7 months
Respondents were asked to identify in a typical work week, how many hours they spend meeting with:
- Current technology vendors (vendors whose products/services they currently use/employ)
- Technology vendors that they are not doing business with currently
IT Expenditures and IT Decision Making – Time Spent With Vendors
When respondents were asked about the amount of time that they spend with vendors, their responses varied by amount of time per week and whether the vendor was known or unknown.
No Time Spent With Vendors Each Week
- 33% stated they spend zero time with vendors they are not doing business with
- 17% communicated they spend zero time with vendors they are currently working with
One Hour per Week
- 35% stated they spend zero time with vendors they are not doing business with
- 20% communicated they spend zero time with vendors they are currently working with
Two Hours per Week
- 14% stated they spend zero time with vendors they are not doing business with
- 20% communicated they spend zero time with vendors they are currently working with
Three Hours per Week
- 5% stated they spend zero time with vendors they are not doing business with
- 8% communicated they spend zero time with vendors they are currently working with
Four Hours per Week
- 3% stated they spend zero time with vendors they are not doing business with
- 8% communicated they spend zero time with vendors they are currently working with
Five Hours per Week
- 4% stated they spend zero time with vendors they are not doing business with
- 12% communicated they spend zero time with of vendors they are currently working with
Six – Seven Hours per Week
- 1% stated they spend zero time with vendors they are not doing business with
- 2% communicated they spend zero time with vendors they are currently working with
Eight – Ten Hours per Week
- 3% stated they spend zero time with vendors they are not doing business with
- 7% communicated they spend zero time with vendors they are currently working with
More Than Ten Hours per Week
- 2% stated they spend zero time with vendors they are not doing business with
- 5% communicated they spend zero time with vendors they are currently working with
IT departments spend an average of 4.11 hours/week meeting with current vendors.
IT departments spend an average of 2.14 hours/week meeting with prospective vendors. The breakdown of prospective vendors between traditional and new or emerging is as follows:
- 72% with prospective vendors or traditional vendors
- 28% with prospective vendors or new or emerging vendors or start-ups
68% of IT departments spend one hour or less with vendors they are not already doing business with.
IT Expenditures and IT Decision Making – Relevant & Meaningful Contnent
Marketers all seem to struggle with providing relevant and meaningful information to prospects during the purchase process. When asked which of the following information sources are used to keep up-to-date with new technologies and to enhance the knowledge needed to be effective in their role, the following was revealed:
- Peers technology 77%
- Technology content sites 74%
- Technology vendors 72%
- White papers 62%
- Webcasts/Webinars/Web video 60%
- Events 57%
- Newsletters 53%
- Research 51%
- Technology print publications 49%
- Online communities, discussion forums 47%
- User groups 43%
- Business content sites 35%
- Blogs 33%
- Virtual conferences 30%
- Video clips 29%
- Business print publications 27%
- Mobile feeds/updates 21%
- Infographics 18%
Diving deeper into the number one response-Peers- the following insights were revealed:
Peers
- Inside one’s company 54%
- Outside one’s company via phone, email, in-person – 60%
- Outside one’s company via social media – 41%
How do prospects engage with technology vendors
- 54% via vendor website
- 50% via phone, email, in-person
- 24% via social media
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