The era of decentralized technology purchasing decisions is here
The new buying landscape puts pressure on tech vendors to become more agile and ensure their brand, message, and products resonate with customers.
“We’ve seen two years of digital transformation in two months.” That’s how Microsoft CEO Satya Nadella summarized the accelerated pace of technology adoption across every industry during the pandemic. Nadella’s assessment is spot on but I’ll also add that in addition to speed, leaders have expanded their sense of what can be achieved with technology—going beyond cost savings, it’s now viewed as the key to winning the recovery.
With no signs of slowing down, the post-COVID need for more technology is a golden opportunity for SaaS vendors. However, the tech-purchasing process has evolved since COVID-19, ushering in a new era of distributed decision-making.
I’m seeing first-hand how this new reality puts greater pressure on technology vendors to become more agile and make sure their brand, message, product, and new ideas resonate in a changed buying landscape. Our recent study of 252 IT decision-makers¹ (ITDMs) uncovers the key dynamics of this new era and what’s on decision-makers’ minds.
What does this new era look like?
While IT continues to hold a large share of the purse strings, software and technology decisions are expanding beyond IT. Only 48% of IT decision-makers say that final IT purchasing decisions are made by a single decision-maker, with the other half requiring a committee or team (52%). In response, IT is pivoting to serve as a strategic guide for purchasing decisions. Here at Momentive, we partner closely with business stakeholders to understand the needs and vendor options. It has to be treated as a team sport.
Non-IT stakeholders play an increasing role in IT purchasing decisions
With increased pressure to develop technical capabilities, more functional departments outside of IT are participating in the buying process. In fact, 72% of ITDMs say that end-users have a say in the decision-making process. As business models continue to evolve, SaaS companies should count on engaging more non-IT stakeholders throughout the buying process.
72% of ITDMs say that end-users have a say in the decision-making process.
What today’s IT decision-makers really want
Is it reputation or flexibility? Pricing or support? B2B technology buyers have a myriad of needs and it’s challenging to understand what their top preferences are. It turns out when considering a vendor, IT decision-makers are looking for security and reliability as the leading reasons for selection. Addressing business needs, flexibility and availability of the solution, and compatibility with existing systems trail slightly, but are still among the most important criteria.
B2B decision-makers say brand values matter
Brand perception and brand tracking are no longer just a B2C priority. Even B2B companies need to worry about brand authenticity. Most IT decision-makers say a vendor’s Corporate Social Responsibility (CSR) values play a role in selecting the vendors they work with, with 90% saying that CSR is ‘very important’ or ‘somewhat important’ to the decision-making process. A similar proportion (89%) say that they are ‘very likely’ or ‘somewhat likely’ to stop purchasing from a vendor if they made a business decision that conflicted with their organization’s values. This trend is consistent with a study of 500 IT professionals we ran in February 2021, where 89% of C-level executives said company reputation matters the most when making a decision about a software provider.
90% of ITDMs say a vendor's corporate social responsibility is 'very important' to the decision-making process.
Ultimately, technology buyers have more expectations of their vendors, which means technology brands will need to stay agile and demonstrate they can respond to buyer’s evolving needs.
Succeeding with today’s buyers requires deeper insights
According to Gartner, worldwide IT spending on enterprise software is projected to total $598 million in 2021, an increase of 13.2% from 2020. The upside is huge for SaaS companies but the buying process is more complex, with more stakeholders and expectations.
Capturing buyer’s attention, brand building, and keeping pace with the buying committee’s evolving needs creates a growing need for tech brands to tap into deeper insights to connect with customers and make faster decisions with confidence. In a Gartner news release, Christy Uher Ferguson, research vice president at Gartner echoed this sentiment: “Technology providers often create go-to-market (GTM) strategies with limited insights into how an enterprise will make a buying decision.”
Taking a page from the consumer strategy playbook, B2B brands are turning to agile market research to understand their customers’ needs today and tomorrow. With instant insights, technology brands can stay top of mind with buyers, build products customers love, and make bold data-driven decisions to outmaneuver their competitors.
Eric Johnson is chief information officer at Momentive.
¹This Momentive study was conducted on July 26, 2021 among a sample of 252 IT decision-makers. Respondents for this survey were selected from the more than 2 million people who take surveys on the platform each day.