IT STRATEGY

  • 04/28/2014
    9:00 AM
    Mark Peters
  • Mark Peters
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Bye-Bye, Traditional IT Buyer

Recent ESG research suggests the writing is on the wall for traditional IT purchasing processes. Three trends are putting pressure on the standard IT procurement formula.

For decades, the standard model for IT procurement has typically involved an IT manager being aware of an IT need and then quantifying it. This happens with more or less involvement from organizations’ buying and legal departments (which is either more or less welcome!). The IT manager will then hold some type of beauty contest among the usual-suspect vendors (directly or virtually via a partner). Then a winner is selected, usually based on criteria the buying IT manager determined before going into the decision-making fray.

But recent ESG research indicates that three factors are conspiring (well, maybe that’s too dramatic a word, but they're certainly combining) to put this formula under pressure. They are:

  1. Continuing growth in the adoption of cloud computing
  2. Changes in the demographics of IT personnel
  3. More involvement in IT decisions by non-IT personnel

Each of these areas changes the traditional dynamics, and, arguably, weakens the central role that IT managers have long had in determining what runs in their datacenters, and beyond. Let’s look at these three trends in a little more detail.

Cloud computing is the top 2014 IT priority and the highest concentration of expected increased spending. The combined number of organizations prioritizing cloud-based infrastructure services (i.e., IaaS), business applications (SaaS), and/or application development (PaaS) shows that public cloud computing services will be a key focus for 40% of IT organizations this year. As such, it follows that IT departments are most likely to increase spending in the area of public cloud computing. With cloud models, the traditional IT buying model is disrupted because it is more likely to be a cost/service-level/flexibility-based purchase than a specific IT vendor decision.

Younger companies and IT personnel have different buying proclivities. Just look at your kids (if you have them) to understand this. IT to them is not the marvel it has been to us older folks. It is simply a tool, and as such, it's just a low-risk utility, which can open them up to considering newer options, tools, and vendors much more quickly.

For example, according to the ESG survey, nearly three-quarters of organizations that have operated for 10 years or fewer currently use SaaS, compared with only 56% of those that have been in existence for more than 50 years. Meanwhile, IT professionals 35 and under are nearly three times as likely to believe Amazon Web Services is an important contributor to their organizations' future success than are IT pros older than 55. This demographic change means less focus on traditional vendors, and probably even the methods of choosing them.

Line-of-business involvement in the IT evaluation and purchase process is not a fad. More than half of the IT respondents in the ESG survey stated that the business groups and other professionals in their organizations have -- to some extent -- become more involved in the IT purchase process over the last 12 months. The implication for IT managers is twofold: The best outcome is having to accept the input of others into their decision making; the worst is that other groups go off (with or without IT’s blessing) and make IT purchases of their own.

Of course, this shift in IT procurement is not all a done deal yet; there still are plenty of beauty contests going on. The point, for those nearer retirement than college, is to avoid putting your traditional IT purchasing fingers in the dam of IT change, as you are likely to get very tired and/or very wet! Take a look in the mirror: The older you are, the more traditional you are likely to be in both your approach to IT purchasing and (not surprisingly) the IT purchases you ultimately make; consequently, there will be more expectations -- perhaps even pressure -- to change.

However, the great thing about age is the experience that comes along with it, which means, of course, that the pendulum is likely to swing back every decade or two, as it has always done.

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