IDC Interview: Financial Justification a Requirement for Technology Buyers

If you’re marketing and selling technology solutions, being able to communicate and quantify your unique value to prospects is more important than ever, this according to leading IT analyst firm IDC.

In an interview with Randy Perry, VP of Business Value Consulting for IDC, we discussed several key changes in purchase decisions for hardware, software, Cloud and services, leveraging IDC’s research from over 400 enterprise buyers over the past two years.

Those in charge of technology decision making have changed, with business groups in charge of most technology purchase decisions, now driving 58% of demand, criteria, budgets and approvals, and the number of purchase decision makers increasing by 43% over the past two years, now involving 8 to 10 decision makers.

With these changing roles, tech buyers care most about driving business growth (35%) and reducing risks (28%), versus what used to matter much more in the past: how the technology investment would reduce total cost of ownership (13%) or drive productivity / process improvements (24%).

One thing that hasn’t changed is the need for understanding and quantifying the business value outcomes of proposed solutions is a requirement for a whopping 95% of decisions. Buyers are putting less emphasis on features and price, and more on business value outcomes, both on the initial purchase and on renewals as well.

Although business value analysis is required, most buyers struggle with the numbers. According to IDC, 2/3rds of buyers indicate they don’t have the knowledge, research metrics or tools needed to do ROI / business value calculations. Mr. Perry indicated that relying on the prospect to on their own develop the business case can lead to significant delays in the decision cycle, and results in more deals ending in “no decision”.

Without the knowledge and metrics on their own, the task of articulating value and providing financial justification falls to the solution provider. IDC indicates that 81% of buyers expect vendors to quantify business value of proposed solutions.

The conundrum? Although buyers require vendors to deliver business value assessments, they often don’t trust the results, knowing at the end of the day that the solution provider is out to sell something. Unless 3rd party validation is provide, less than 15% of buyers trust the results. Independent research, financial models and analysis tools and success stories cab significantly boost credibility and trust.

So how do you best address the requirement for business value?

Checkout the roadmap to value success and some great examples on how to overcome these
challenges here:

On-demand webcast -

Slides here -

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