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Insightful research, flexible data, and deep analysis by a global SMB IT Market Research and Industry Analyst organization dedicated to tracking the Future of SMBs and Channels.

Survey shows SMB and Midmarket BDMs control cloud business applications purchase

Techaisle's SMB & midmarket decision making & buyers journey report confirms that business decision makers (BDMs) – who tend to inhabit the ‘carpeted’ realms of their businesses – are more engaged by discussions about business benefits and objectives than by ‘feeds and speeds’. Cloud business application sales reps will need to develop ‘deep carpet’ language and skills. Techaisle survey data shows that:

  • 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 midmarket businesses where it is nearly 2:1
  • Neither business nor IT have a clear authority within 29 percent of small businesses and 22 percent of midmarket businesses to purchase new business applications, yet, cloud applications do get adopted driven by need, experimentation, and rogue adoption
  • At 32 percent, ad-hoc purchases are more popular within upper midmarket businesses than any other employee size business
  • Business management also has authority over determining the needs for enhancements to cloud business applications. The balance of authority within small businesses is 5:1 in favor of business management and 1.2:1 for mid-market businesses
  • Neither business nor IT have a clear authority within 17 percent of Small Businesses and 21 percent of midmarket businesses to enhance already deployed business applications, yet, these applications do go through significant modifications and upgrades to better serve the needs of business management
  • SMB Business management controls the budget and purchase authority by 8:1 as compared to IT management. However, within the midmarket businesses, the control ratio drops to 2:1 indicating that it is easier to sell cloud technology to small businesses than midmarket businesses since the decision-making units are dissimilar
  • 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
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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
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Techaisle survey shows SMB BDM involvement in IT security operations is minimal

A trend that is frequently discussed in industry journals revolves around the growing involvement of business decision makers (BDMs) in the IT acquisition process. There is a further issue that is not generally the subject of trade publication articles, though: the extent to which BDMs are going beyond system selection and acquisition, and involving themselves in IT operations.

To obtain some visibility into this issue, Techaisle asked SMB & Midmarket survey respondents (reported in three of Techaisle reports: 1/ SMB & Midmarket Buyers Journey 2/ SMB & Midmarket, ITDM vs BDM Decision Process) to identify the party (ITDM or BDM) most responsible for various aspects of cloud and mobility security. The results both provide insight into the IT operations activity levels of BDMs, and into potential issues that might arise as a result of ad hoc, unplanned and business driven IT purchases (or shadow IT).

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Influencing the SMB non-IT C-level buyers requires careful marketing mix

Over the past decade, there has been an explosion in the number and types of information sources available to SMB IT and business decision makers. It is no longer the case that these ITDMs and BDMs can be moved predictably through a process that starts with an initial inquiry and progresses through education to qualification and to a sale. Instead, technology buyers are increasingly self-educated and make contact with a supplier, not with an initial inquiry, but with a fully-formed request.

Techaisle’s survey of 1120 US SMBs, 360 on Balance of Authority: decision cycle, shows that SMBs engage with IT supplier at 50% decision stage. In fact, worst still, the IT supplier’s and channel partner’s role begins in when price, deployment & support are the only points left to discuss.

Techaisle’s corresponding survey of 1246 US SMBs, Influencing the SMB buyers’ journey, shows that “Campaign marketing” has become a relic of an earlier age, replaced by a content marketing brew combining “thought leadership” (to engage new prospects) and ‘digital discovery’ (to ensure visibility for the thought leadership).

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