Why Business Executives are the New IT Buying Center

Several times a week the IDC CMO Advisory Service gets inquiries from tech company clients about how to shift their company mindset to a new and different buyer.  IDC’s IT Buyer Experience Study shows that business buyers have 53% of buying influence in the earliest part of buyer’s journey and their influence stays high throughout the entire process.  The tech buyer’s influence, while still important, is comparatively waning.

A successful shift to a business-buyer approach will accelerate if you understand what’s behind it.

Front office automation has more business risk than back office automation.  The 2nd Wave (as IDC calls the client-server era) was mainly about automating things inside your company.  The 3rd Wave (as IDC calls the current era of cloud, mobile, social, and big data) is about automating your connections to the outside world (I call it the company “skin”).  When tech problems happened deep in inside your company, it was frustrating but not devastating.  The worst business tech problem of the 2nd Wave was being too slow to adopt new technology leaving competitors or upstarts to sail past you with business process advances.  That problem is still a concern today.  However, add the horror of screwing up in front of customers, investors, influencers, indeed, the whole world!  Just ask the CEO of Target.  Business executives are forced to pay attention to technology today – whether they want to or not. IDC forecasts that business executive budgets for technology will outstrip IT budgets.

Technology is easier and prettier now. Back in the day it took a real expert to understand the ins and outs of information technology products.  The products were intimidatingly gray and beige and filled with exposed wires and chips.  They hummed, got hot, and sparked out with regularity.  No wonder the finance and marketing execs wanted to leave those suckers alone.  Now most of those wires and chips are moving to the “cloud”.  Doesn’t that sound nicer?  Devices you touch are smooth and have pictures. Better design makes technology 99% invisible (to quote the title of one of my favorite podcasts).

Business executives are smarter and more confident about technology.  Back in the day, technology was a startling thing that business people in the prime of their careers had never seen, much less used.  I remember one intelligent, capable, and admired, C-suite executive who used to have his administrative assistant print out his email because he wasn’t quite sure how to use it.  Now, anyone younger than 60 came of age with PCs and programmable everything.  Information about technology is available at everyone’s fingertips and accessing opinions from your professional network is incredibly easy. While a portion of the population will always be skeptical or frightened about the next new thing – it’s not likely to be IT that they are scared of (drones, anyone?).

Here are some steps you can take to accelerate the shift to a business-buyer focus:

  • Bring focus on the business decision-maker up to par with the technology decision-maker.  This is the Goldilocks strategy – not too much but not too little. For most new tech installations, IT will no longer instigate nor approve nor pay.  However, at some point the business executives will want to bring in their IT partner to take over some aspects of the decision.  Keeping adjusting your investments in content, campaigns, training, etc. until you’ve reached a balance in results.  Because this is a change you will have to overinvest in activity to achieve new results.
  • Take clues from the shifts described above. Focus value propositions on front office business problems.  Build in cloud, mobile, social, and big data messages and capabilities (IDC says 90% of IT growth is coming from these areas). Make the “ugly” of tech 99% invisible – in your customer engagement, your sales discussions, and in the products themselves.  But that doesn’t mean be fluffy. Much of what is called “thought leadership” is astonishingly useless.  People are trying to solve real business problems.
The worm has turned as the saying goes. We are never going back to the old way.  Tech companies who succeed will be the ones to step up to investments they need to make to serve the empowered business buyer.

Solution Marketing: Just What Is a “Solution”?

“How do we progress from offering products to offering solutions?” This urgent question has reached the top of many technology CMOs’ initiative list. When IDC interviewed solution marketing experts for the newest report in our CMO Advisory best practice library, they confessed that that the first issue to tackle is agreement on what is a solution.

IDC predicts that by 2016, more than 80% of technology purchases will significantly involve the line-of-business buyer, who will specifically drive 40% of all purchases. These business-oriented buyers have little patience with technology that can’t be easily connected to a business problem. The new buyer increasingly disdains “raw” products that require substantial work to integrate into something usable. The new buyers seek to buy offerings that are closer to meeting their actual business needs (aka “solutions”).

While the specifics about just what is a solution varied among the experts IDC studied, the gestalt of the answer can be easily grasped by comparing a raw turkey and the complete holiday dinner that it will someday crown.

Consider the Turkey Dinner
In the analogy of the raw turkey and the complete dinner, the raw turkey, as a single component to a completed dinner, is like most standalone technology products. People can’t eat raw turkey. If guests were to be served a raw turkey with no intervention from cooks, they would be sadly disappointed. The raw turkey certainly has value! However, its value is to the cook — not to the ultimate consumer, for whom it is inedible. Technology products, like raw turkeys, solve important operational problems for the builders, or cooks, of the ultimate solution.

Just as the raw turkey must be cooked and incorporated into a meal before it can be really appreciated by a guest, so must a great deal of preparation work be conducted before most technology products are useful to the end user (the customer’s business). Only when enough product components (ingredients) combine with sufficient services so that the end result actually solves a business problem can you really call something a solution. Service work can include planning, consulting, implementation, integration, customization, and training as well as providing financial assistance, overcoming legal or standard hurdles, and more.

Avoiding the Bundling Trap
Companies who want to offer solutions must be especially careful not to fall into the bundling trap. Bundling can be an effective strategy for some situations, but a bundle is not a solution — and companies should not fool themselves into thinking these two strategies are interchangeable. Expanding on the turkey and completed dinner analogy, to host a successful holiday dinner, customers need all the components for the full meal — ingredients, recipes, and equipment to produce it. Then they also need to set a table, decorate the house, put music on, and be ready on time. A good host is concerned about the whole dinner experience for the guests, not just whether the turkey comes out right.

If a company supplies only operational-level technology (e.g. raw turkeys), it must figure out how all the other elements can be put together in a way that can be easily used by the customer. The company must partner with other suppliers and provide orchestration among them.

Solutions require a much more complex go-to-market proposition than products. However, the upside is that solutions offer an even higher value to the customer. By helping customers to have a delightful experience, you create a loyal customer who is more willing to pay a premium and become a proponent of your brand.