Techaisle research shows SMB and midmarket technology purchase process becoming more complex

We are in the midst of a transition from an IT industry shaped by small decision making units (DMUs) comprised of IT professionals to an industry that must respond to the varied needs of BDMs and ITDMs. This makes for a very complex selling environment; many IT suppliers would no doubt like to have ‘the genie hop back into the bottle,’ as many members of their sales and marketing teams lack the skills and understanding needed to sell to BDMs.

Techaisle research on SMB and Midmarket buyers journey and decision-making shows that ITDMs and BDMs have differences in ‘care-abouts, are focused on applying IT to different business objectives, have different perceptions of success measures, and use different information sources. The data is not only helpful in building relevant marketing messages, but also serves to underscore the complexity of working with a diverse DMU. This DMU becomes further complicated with the presence of IT conversant business specialists (embedded IT staff), increasingly residing within line of business units, reporting to business, and away from IT.

• Business management has seized a much greater role in technology acquisition, deployment & management than IT management – varying from 3.4X in “needs identification” to 2.0X in “solution evaluation & selection”
• Within small businesses, business management plays a more influential role than IT in five out of nine stages of technology solution adoption
• Within mid-market businesses, role of business management is predominant in the first three stages of decision making (needs identification to solution options), equal to IT in the next two (solution evaluation & selection) and substantially higher than IT in the last two stages (determining solution effectiveness and optimization)
• In nearly 1/4th of small businesses and slightly over 1/3rd of medium businesses, technology specialists (embedded IT staff) are employed within Business Units not reporting to IT management. In nearly 50 percent of midmarket firms that have IT specialists, they are the primary decision makers
• Determining the need for new cloud business applications is the prerogative of business management. The balance of authority within SMBs is nearly 7:1 in favor of business management except in the case of mid-market businesses where it is nearly 2:1
• Ad-hoc purchase and deployment of new cloud business applications is prevalent within 22 percent of mid-market businesses
• In 15 percent of SMBs budget for new business application is usually created at the time of ad hoc decisions for purchase to meet business needs

The data mentioned above indicate an important factor in technology solution acquisition success: the need for IT and business to work together to ensure that all stages of the purchase process meet both technical and process requirements. In the survey, Techaisle found that just over 20 percent of SMBs have taken a further step to address the need for what is sometimes referred to as “double deep” (with respect to IT and business experience) employees by positioning IT specialists within business units, reporting to business (rather than IT) management.

This trend is widespread in small business outside of micro (1-9 employees) businesses, with an average of roughly 45 percent of firms in the 10-99 employee categories reporting the presence of IT specialists within business units. In many cases, this is an informal connection, with IT-savvy employees responsible for IT-dependent processes. However, within mid-sized businesses, in which an average of 36 percent of firms report having IT specialists resident within business units, this is a more conscious strategy, with IT support embedded within the line of business department. In both cases, though, these staff members are an important influence point for new solutions. Roughly 30 percent of small businesses and nearly half of mid-sized firms reporting that have IT staff resident within business units state that these staff members are the primary decision makers for new IT solution purchases. It is important for IT suppliers to understand whether their current and prospective accounts have IT specialists assigned within business units, and where they do, to establish strong relationships that will enable the supplier to understand and respond to IT/business solution demand.

The trend towards increased BDM involvement in IT decisions is unlikely to recede. BDMs are already active in shaping demand in core IT markets. Techaisle’s recommendations to suppliers looking to navigate this new industry order include:

• Build a ‘ground up’ understanding of how your products/services connect to solutions that address business needs. Unlike ITDMs, who often were attracted to the IT department because they had an affinity to technology, BDMs are unlikely to want to discuss the technological attributes or advantages of a specific component; they are going to look for an IT solution to a business problem and expect vendor communications to reflect an understanding of that business problem, and to articulate solution benefits in business terms.
• Build an understanding of BDM ‘care-abouts’ and conduits. As we have shown in several places in this document, BDMs are different from ITDMs in what they consider to be important in a solution, how they evaluate success, and where they look for information to support a solution decision. Sellers must understand how and where to position BDM messages, even as they continue to structure and position messages for ITDMs.

Develop the skills needed to sell to BDMs, and the metrics needed to support BDM sales. It is one thing to understand what BDMs care about, and how to position messages in front of them; it will be quite another to sell effectively to a non-traditional buyer. Most IT sales staff lack the language and understanding needed to be an effective advocate with BDMs – and yet, the skills of the existing sales force are important in managing ongoing relationships with ITDMs. Consider creating a ‘tiger team’ that is capable of speaking on a business level with BDMs, and/or partnering with firms (such as consultants) who do this in the course of their business. It is also important for management to develop and track metrics that connect with BDM sales and marketing activities, including separate and/or gated quotas that encourage BDM business development and marketing metrics that reward campaigns that attract BDM interest.