Why Business Users Want More Say In Enterprise Technology Spend

by Margaret Pacheco | Marketing and Branding

Why Business Users Want More Say In Enterprise Technology Spend

Research companies such as Forrester and Gartner are shedding light on the growing shift of technology spend. Increasingly, CMOs, COOs, line managers and others in senior management are becoming the lead decision-makers for IT purchases.

Why are CMO and other business executives expanding their responsibilities to this area? Isn’t that the CIO’s job?

In order to engage as marketers with a buyer of less technical experience, it’s important to understand why this shift is happening. Here are three key drivers of this trend:

1. Technology Drives Business Results

A study from MIT Sloan Management Review shared that most company leaders believe technology is the key to business transformation. Increasingly, it’s believed that technology can have a direct, and often immediate, impact on the bottom line by helping brands:

  1. Engage and nurture potential buyers
  2. Improve customer experience
  3. Streamline operations
  4. Create or improve business models

How strong is their faith in technology meeting business goals? Apparently, strong enough they’re spending their own resources. Of the 891 business executives from Forrester’s study, approximately 24 percent reported spending their own budget. Not just a small portion either, but a whopping 21 percent of the unit’s budget was spent on acquiring IT. To give you an idea, that accounts for over $31 billion in expenditures.

Senior management in sales and marketing were the top spending business functions. The use of social media, analytics, mobile and embedded devices have contributed to the increase in spending in these business units.

2. Business Leaders Understand Their Needs

Who better understands a business unit’s pain points than the respective manager? Senior management in marketing, sales and operations are conducting research and participating in vendor selection because, frankly, they don’t see it as being IT’s strong point.

CIOs and their teams have enough on their plate. If a CMO can either conduct or assign the vendor research and selection, this will save time and be more likely to produce the desired outcome. Business leaders have become increasingly impatient with what they perceive as longer buying cycles when purchases are led by IT.

3. Technology Is No Longer Intimidating

The rise of smartphone, tablets, and everything else the average consumer uses on a daily basis is contributing to the way we’re using technology in business.

John McCarthy, the author of Forrester’s study on tech spend, shared that 33 percent of high spenders say their technology IQ has increased and they’re more comfortable working with IT. Another 20 percent say that their use of consumer technology has changed their expectations of how technology can be used.

How IT Departments Fit into the Tech Spend Picture

CIOs may not be making the initial decision as to which tech vendors make it into the final consideration set. But they are still held responsible for ensuring all the web platforms and technology services work together.

Companies are starting to view CIOs and IT departments as a kind of business consultant when it comes to tech spend decisions. For example, it may make sense for a business unit to use Salesforce. But IT may identify a benefit to purchasing the enterprise license for use by the entire company rather than a single unit. CIOs ensure the company’s big picture is taken into account so that all technology is compatible.

As analyst Andrew Bartels puts it:

The ideal tech-buying process is one in which the business and the CIO’s team work together to identify a need, find and fund a solution, choose the right vendors, implement it and manage it.

On Monday, we’ll discuss how to reach today’s tech buyer by crafting a buyer’s journey for sales conversion.

 

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