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Market Development Strategy & IT Models

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As B2B sales and marketers plan and execute market development strategy, it’s mandatory to account for the various IT models to be effective.   IT may either lead a B2B technology purchase or simply be pulled into the buying process to validate. B2B sales and marketers must account for IT in the customer buying cycle as IT can often make or approve a technology purchase decision as well as prevent or delay a purchase.

IDG executed a research study to better understand the role & influence of IT during the technology purchases for B2B enterprises.  Summarized below are some of the insights into IT models, roles and responsibilities, collaboration patterns and steering committees.

Market Development Strategy & IT Models

When respondents were asked which of the following best describes how their company’s IT organization is structured today, the responses were as follows:

Centralized 55% – i.e. where the CIO controls centralized IT assets/budgets

  • In companies with more than 1,000 employees, centralization was reported to be higher at 66%.
  • In companies with less than 1,000 employees, centralization was reported to be lower at 42%.

Federated 37% – where some decisions and budget are centralized, but other decisions, assets and infrastructure are distributed

  • In companies with more than 1,000 employees, a federated model was reported higher at 50%.
  • In companies with less than 1,000 employees, a federated model was reported to be lower at 26%.

Decentralized 8% – where each IT business unit is fully independent when it comes to IT projects and budgets

  • Company size had no impact on the percentage of respondents as each cohort reported 8%.

For B2B sales and marketers to engage in meaningful and relevant conversations with prospects, it is vital that they fully understand the various personas involved in the purchase process. Specifically, it is imperative to understand the areas of responsibility for each persona and the impact each person is likely to have on business outcomes.

Market Development Strategy & IT Roles & Responsibilities

When respondents were asked about their organizational responsibilities, the results conveyed that the central role of technology extends IT focus and influence. Specifically, respondents stated they were involved with the following:

Setting IT Standards and Policies: Overall 70%

  • Executive IT 86%
  • Mid-Level 67%
  • IT Professionals 46%
  • Business Management 25%

Setting IT Project Goals: Overall 67%

  • Executive IT 81%
  • Mid-Level 68%
  • IT Professionals 47%
  • Business Management 24%

IT Department Budget Responsibility: Overall 51%

  • Executive IT 71%
  • Mid-Level 45%
  • IT Professionals 17%
  • Business Management 15%

Vendor Contract Negotiations: Overall 55%

  • Executive IT 73%
  • Mid-Level 49%
  • IT Professionals 20%
  • Business Management 31%

Collaboration with Departments Outside Of IT on Projects or Technology Needs: Overall 74%

  • Executive IT 80%
  • Mid-Level 76%
  • IT Professionals 62%
  • Business Management 55%

Setting Business Standards and Policies: Overall 48%

  • Executive IT 62%
  • Mid-Level 32%
  • IT Professionals 16%
  • Business Management 49%

Setting Business Project Goals: Overall 44%

  • Executive IT 55%
  • Mid-Level 30%
  • IT Professionals 13%
  • Business Management 64%

Consensus Based Buying Demands Consensus Based Selling

It’s not that an IT purchase decision is never made at the top and forced down the organization. It’s just that the vast majority of IT (major) purchases are usually made by numerous individuals spanning multiple groups with roles that include recommender, influencer, decision maker, approver and sniper. As a result, it’s paramount for B2B sales and marketing personnel to understand the size and scope of consensus-based buying.

The Number of Influencers in Enterprises Technology Purchase Decisions

The number of influencers varies based on the IT model for major technology purchases (beyond phones, tablets and laptops):

  • Overall: 10 employees were involved
  • Centralized: 9 employees were involved
  • Federated: 12 employees were involved
  • Decentralized: 11 employees were involved

When respondents were asked to estimate the total number of people, on average, involved in influencing major enterprise technology purchases within their organization, the following responses were tallied:

Major Technology Purchases (companies with more than 1,000 employees):

  • In 2011, respondents reported 11.5 employees were involved
  • 2012-2014, respondents reported 17 employees were involved
  • 2015, respondents reported 16 employees were involved

Major Technology Purchases (companies with more than 1,000 employees):

  • In 2011, respondents reported 5 employees were involved
  • 2012-2014, respondents reported 6 employees were involved
  • 2015, respondents reported 6 employees were involved

Market Development Strategy –  Collaboration Mix Changes by Title

IT management collaborates with an average of 4.2 people:

  • IT staff 61%
  • CIO 55%
  • IT Mgmt 54%
  • LOB 45%
  • Steering Committee 45%
  • IT Liaison 44%

Executive IT collaborates with an average of 3.4 people:

  • CEO 45%
  • IT Staff 42%
  • CFO 38%
  • LOB 32%
  • CIO 30%

Business management collaborates with an average of 3.2 people:

  • CIO 42%
  • LOB 40%
  • IT Liaison 33%
  • CEO 31%
  • IT Staff 27%

IT Professionals collaborate with an average of 2.5 people:

  • IT Staff 76%
  • IT Mgmt 35%
  • CIO 26%
  • IT Liaison 25%
  • CTO 22%

Sales cycles are often reported to be stalled on the forecast call or in the sales force automation system. What happens is that the B2B sales rep typically establishes a point of entry into an account and the sales process appears to be moving smoothly. Suddenly the B2B customer acquisition process comes to an abrupt halt and may even take a step backwards. Often an IT steering committee exists which was not part of the initial sales process. As a result, the IT steering committee enters the buying process and the sales process, to accommodate this, has to back-up. It’s important to identify whether or not there is an IT steering committee, if it needs to be involved in this purchase and if so, to engage the committee early-on.

The Existence and Makeup of IT Steering Committees Shifts by Company Size

When asked if their organization had an IT steering committee and the ratio of IT to business stakeholders, respondents communicated as follows:

52% of SMB organizations have an IT steering committee:

  • <1,000 21% there is more representation from IT than from business stakeholders
  • <1,000 25% there is equal representation from IT and business stakeholders
  • <1,000 54% there is more representation from business than IT stakeholders

80% of enterprise organizations have an IT steering committee:

  • 1,000+ 30% there is more representation from IT than from business stakeholders
  • 1,000+ 29% there is equal representation from IT and business stakeholders
  • 1,000+ 24% there is more representation from business than IT stakeholders
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