The Technology Purchase Process

The Technology Purchase Process

IDG (opt-in required) published some research about The Technology Purchase Process that examines the evolving role of IT decision-makers in today’s businesses, specifically as organizations move towards a more digital-focused business and that information is summarized below.

The Digital Transformation Trend

Digital Transformation is ushering in important changes in the way organizations buy technology, with business users increasing their involvement in decision-making overall and choices of new technology.  The survey finds that IT departments remain top dog when finalizing most of these decisions, in
large part because they have taken a leadership role in digital transformation.

The Technology Purchase Process – What’s Driving Tech Purchases

Reasons for Technology Purchases

  • Additions 37%
  • Upgrades 32%
  • Replacement 31%

While business users are unquestionably becoming more involved in the technology decision-making process, the survey belies the conventional wisdom that IT organizations are losing control of technology spending as a wave of software-as-a-service and bring-your-own-device options have swept the corporate landscape. IT leaders are more influential in identifying needs, determining requirements and evaluating products than their business-side counterparts, and also significantly more involved in recommending products by a 56% to 34% majority.

Going Digital

The rise of digital transformation as a core corporate initiative has been clear and present for several years.

  • This year, 48% of organizations reported having an active digital-first approach, up from 44% in 2018.
  • With an overall of 93% of organizations, an overwhelming 95% of enterprises (1,000+ employees) and 89% of small and midsize businesses (SMBs <1,000 employees) said they’re pursuing a digital business strategy.
  • The speed with which this process is proceeding is demonstrated by the steadily growing percentage of companies that describe themselves as being in the execution stage (22% this year vs. 18% in 2018).

The Technology Purchase Process – What Vendors Are Winning New Business

Tech Purchases From New & Existing Vendors

  • New Tech Purchases From a New Tech Vendor 53%
  • New Tech Purchases From an Existing Tech Vendor 47%

Of Those Organizations That Purchases From A New Vendor, What Was Purchased

  • Mobile Applications 59%
  • Enterprise Software (SaaS) 58%
  • IoT Devices 56%
  • Security 56%
  • Enterprise Software (non SaaS) 55%

The Technology Purchase Process – What is The Average Tech Sales Cycle

  • Enterprise 5.4 months
  • SMB 4.3 months

Average Tech Buying Cycles by Technology

  • Enterprise Software (non SaaS) 6 months
  • Networking 5.4 months
  • Telecom 5.3 months
  • Enterprise Software (SaaS) 5.2 months
  • Mobile Applications 5.2 month
  • IT Services 5.1 months
  • IoT Devices 5.1 months
  • Cloud Computing 4.9 months
  • Data & Analytics Servers / Storage 4.9 months
  • Security 4.5 months
  • Desktop / Laptops 4.5 months
  • Web Applications 4.5 months

Who is Involved in Tech Purchase Decisions

The number of people involved in the average major enterprise technology purchase jumped to 21 this year, up more than 30% from 16 in 2017.

  • The largest teams are those involved in enterprise software, analytics, cloud and IT services decisions.
  • The smallest teams are the ones that buy web apps and desktops.

The average number of IT influencers is 21

  • 11 from IT
  • 10 from LOB

Who Writes the Check for Tech Purchases

  • The buying process is clearly affected by who writes the checks.
  • IT is the primary budget holder for 69% of tech purchases, and when making the short list, IT primarily researches and creates the short list (61%).
  • Overall, IT has budget responsibility for the vast majority of technology purchases: 86% for servers and storage, 80% for security and 76% for cloud computing and 71% for IT services

Enterprise Content in Tech Purchases

Content Used to Influence Determining Business Needs

  • Tech Content Sites
  •  White Papers
  • Executive Conferences
  • Peers Inside the Org
  • Peers Outside the Org
  • Webcasts

Content Used to Influence Determining Technical Requirements

  •  White Papers
  • Tech Content Sites
  • Technical Content From Tech Companies
  • Technical People From Tech Companies
  • Peers Outside the Org
  • Webcasts

Content Used to Evaluate Products & Services

  • Tech Content Sites
  • White Papers
  • Tech Vendor Website
  • Tech Vendors
  • Peers Outside the Org
  • Webcasts

Content Used to Recommend & Select Vendors

  • Tech Content Sites
  • Peers Outside the Org
  • White Papers
  • Peers Inside the Org
  • Tech Vendor

The Technology Purchase Process – Prospect Expectations For A Sales Meeting

Prospect Expectations for a Tech Sale Meeting

  • More detailed information specific to my business use case/our needs 62%
  • Information to help us make a final purchase decision 58%
  • View demos/case studies of the vendor’s product/solution 44%
  • Negotiations on price or other potential contract terms 33%
  • The chance to express our particular frustrations or business challenges 30%
  • Stronger relationship with sales representative 28%

Additional Marketing Automation & Predictive Marketing Resources From Four Quadrant

Cloud Computing Report – Users & Providers >>

CMO Spend Research>>

MegaTrends in Analytics >>

IT Spending Research & Surveys >>

Cloud Computing Research >>

Strategic Account Planning Template >>

Go to Market Strategy Planning Template >>

Go to Market Planning Examples

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