By: Gerry Brown, Analyst - Digital Marketing & CRM, Bloor Research (Moved)
Published: 13th December 2012
Copyright Bloor Research © 2012
This article outlines 4 key underlying strategic IT business drivers that will shape the global IT industry of 2013 and beyond. No mention here of short term 'here today / gone tomorrow' products. We focus on the big things - our changing perceptions, behaviours and attitudes towards IT management, and how they will affect the way we choose, use and manage IT for strategic business advantage.
Trend 1: Tech adoption and spend will be conservative rather than radical
We will adopt more technology from 2013-2015. But perhaps not spend that much more to get it. Tech in general is getting cheaper, driven by intense competition, so you will also get more for your money. The transparency of supplier product and pricing information means customers can evaluate offers without direct engagement with sales people. Procurement departments are powerful and engaged, and vendors now need to offer free trials and other commercial incentives such as discounted professional services to get a foot in the door.
Annual rental contracts for cloud solutions turn software and services into operating expenditure rather than capital expenditure. So there is less up-front financial investment and potential supplier lock-in, and vendor switching is easier. Large enterprises have rationalised their IT suppliers and have largely chosen those they wish to have long-term relationships with. This does not mean that enterprises are not amenable to approaches from new innovative vendors, but new vendors need to prove they can work within an established enterprise IT framework to be successful.
IT budgets will be tight, procurement processes will be extended, and deals made (in both monetary value and long-term commitment) will be below vendors' expectations. It's a buyer's market. Customers will only buy IT where there is a clear requirement that delivers a clear business benefit, and where there is a high probability of deep user adoption.
Trend 2: Tech procurements will aim to deliver incremental improvements rather than complete infrastructure change
A tiny fraction of the capability of software is utilised. Most features and functions are never used. Most applications are too intricate and complex for end users to absorb their depth and breadth. A surgical focus on the latent points of business pain is required rather than asking end users to sink or swim within a seemingly never-ending list of difficult-to-understand menu options.
Investments will be in discrete 'no brainer' applications. For example in digital marketing some elements of search engine optimisation (SEO), web site navigation and e-commerce check-out, and retargeting old sales leads deliver virtually guaranteed ROI. They provide some sales lift at relatively low cost and low user learning and time investment, hence increasing profit. Focused investments will be preferred over speculative large IT investments involving maximising the use of all product features and functions. Move the needle rather than boil the ocean, in other words.
Mostly end users don't know where business inefficiencies are, except when there are glaring inefficiencies. They need to know where new technology can be applied to improve business processes. 'Best practice' benchmarks and ROI case studies from vendors will be in demand to unearth 'proof points' to justify investments and fuel business cases.
Trend 3: The IT department will become a business support function rather than a geek castle
IT and Marketing have a lot in common in this area. Both are often perceived as necessary evils. Both are poorly understood by senior management and are rarely represented at Board level. Both are accused of being spendthrift and lacking commercial acumen. IT and Marketing leaders have low job security, as they are both perceived as being easily replaceable. Ironically however, both are seen as the saviours of modern businesses by business leaders.
As McKinsey says "we're all marketers now". They should also add "we're all digitally savvy now".Â As the popular phrase goes "a little knowledge is a dangerous thing." Both IT and Marketing appear easy to perform to voyeuristic enthusiastic amateurs. It's only when people start practicing marketing and IT do they realise their latent complexities.
IT needs to start behaving like a concerned mother encouraging its baby to master the skills of walking, rather than always setting down rules and enforcing discipline. IT needs to become the first port of call for users, rather than the last. Business needs will eclipse IT policies and standards. IT needs to earn respect for its helpfulness, responsiveness, expertise and patience. This will help put a stop to rogue departmental buying of technology solutions which are often unfit for purpose.
Trend 4: Vendors will be selected for relationship and helpfulness rather than hard sell
IT folk are plagued by the incessant 'product push' emailing of vendor marketers and ill-informed pestering of their tele-sales teams. IT hasn't got much time to investigate new IT product categories and devour white papers. But they do want to be informed about products and services that are relevant to their organisation's needs.
Smart vendors like Marketo and Hubspot win by adopting high quality content marketing strategies. They argue that interesting, targeted, well-researched and thoughtful content will win the trust of the customer and, sooner or later, a share of their budgets. Such information needs to be relevant to the person's role, delivered at the right time, and at the right frequency, and via the appropriate media (online, press, magazines etc) that IT people learn from. Not easy, but it can be done.
Vendors need to stop fatiguing potential customers with endless emails and promotions and start focusing on building trust and professional relationships between buyers and sellers. The Wild West days of the hard sell IT industry are hopefully behind us now, and both vendors and IT need to demonstrate competence, capability, honesty, authenticity, and a willingness to form business partnerships. Continuity and trust are needed to form long term relationships that will be to the mutual business and financial benefit of both parties.
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