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Techaisle Blog

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.

IT purchase BDM vs ITDM influence within SMB-Midmarket buyer journey

It is clear from Techaisle SMB and Midmarket buyers journey research that both ITDMs (IT decision makers) and BDMs (Business decision makers) play important roles in the (formal and shadow) acquisition of IT products and services. However, Techaisle research has also found that the distinctions between these roles are not evenly applicable across all types of IT-enabled solutions: in some areas, the business will look to IT for leadership, and in others, it will take direction from BDMs.

The positioning of these solutions is important to technology vendor sales and marketing strategies. Solutions in the “IT led” category need to have strong IT-focused positioning, with detailed information on product attributes; this material should be supported with a second layer of collateral containing information on the business case for the solutions, and aimed at BDMs. Solutions in the “BDM led” category require very different positioning: here, vendors need to make a strong case for the business benefits and relevance of the solution and orient these messages towards BDMs, supporting this campaign with accompanying technical information designed to provide clear deployment and integration guidance to ITDMs. The “IT/BDM collaborative” category is the trickiest to address. It requires deep information on business benefits and the process steps required to capture those benefits targeted at BDMs, and deep information on how to assemble, deploy, integrate and support/optimize these solutions targeted at ITDMs – and an understanding of how to position and convey the messages to each audience.

Virtualization is IT-led
In micro businesses, BDMs are reported to provide virtualization solution adoption leadership – but in all other employee-size segments, ITDMs are seen as driving adoption. Within mid-sized business, ITDMs are 2.5 times more likely than BDMs to be leading virtualization adoption, and ITDMs are viewed as having complete responsibility for virtualization solutions in nearly one-third of companies with 100-999 employees.

Managed services is IT-led
Survey responses tell a remarkably consistent story about managed services: accounts in each of the employee-size segments ascribe a rating of 36-42 (out of 100) to ITDMs as of managed services initiatives. This is a natural connection; in general, SMBs adopt managed services to reduce IT labor costs, to free up scarce IT resources to take on other tasks, and/or to provide management of complex technologies, such as services. However, BDMs may also have an interest in managed services, as they often provide access to cloud-based capabilities matched with human IT resources.

IaaS is ITDM/BDM collaborative-led
IaaS is deployed in two very different ways: as a cost-effective means of supporting IT infrastructure, generally sourced by IT, and as a means of supporting the specific (and sometimes, short-term) requirements of a business-led project, often paid for by the business team. The data suggests that the IT use case is more prevalent, and indeed, anecdotal evidence (such as the fact that market leader AWS has a very strong presence within the IT developer community) would tend to support this view. However, there is clearly supplier opportunity in the ‘BDM IaaS’ category as well.

SaaS is ITDM/BDM collaborative-led
SaaS is another category that can affect ITDMs and BDMs, as part of a collaborative initiative or individually. SaaS applications themselves can be seen as belonging to many different categories, including SaaS applications that support IT management functions (such as software development, migration/version management, and IT asset management applications) and applications CRM, ERP, HR/talent management, customer service applications, social marketing, etc.) that are designed to be used by specific non-IT users and departments. Use of multiple SaaS applications adds additional complexity, with the need to integrate and secure multiple data streams; this is likely one reason why IT’s influence over SaaS is greater within mid-market firms (which have a greater variety of users and applications) than within small businesses. Data illustrates, these issues eventually define a category in which BDMs are generally seen as having the primary influence over adoption, but where relatively few accounts (no more than 24% in any employee-size segment, and generally 9%-16%) report that BDMs have sole authority over SaaS initiatives.

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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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