Need IT Advice - Don't Ask the CIO
29 Jan 2016
Need IT Advice for Your Business Unit – Don’t Ask the CIO
Mark Yates, IDC Research Manager
Sales and marketing professionals worth their salt know they need a CRM solution to compete in today’s hyper connected business environment. But which supplier? Which CRM elements? And in which order should they be installed? CRM solutions are complicated collections of tools. They can manage outreach campaigns, track customer interactions, segment contacts for targeted marketing, track campaign and product effectiveness, identify unexpected patterns, transfer information with calls, and predict the future. They can also serve as collaboration platforms for suppliers and customers, and suggest when outreach should be initiated or terminated.
The challenges of choosing IT solutions are not restricted to sales and marketing. They are more or less universal across departments. Finance, accounting, human resources, operations, research and development, legal, and purchasing – all of them must wrestle with the distillation of business goals into departmental and IT goals in the light of increasing complexity. Despite the IT angle to business solutions, most CIOs are in no position to offer useful advice. They may be able to connect a cloud-based solution to on-site contact databases and collaboration software. They may also know the degree to which any given solution is reliable, secure, or leads to unwanted vendor lock-in. But matching departmental goals with the specifics of a toolbox is almost always outside their formal and informal remit and expertise.
Ask the Experts to Cut Through the Noise
This is the reason why many line-of-business (LOB) leaders are turning directly to IT suppliers. According to a recent IDC survey of LOB managers in Central and Eastern Europe, around 35% reach out to IT solutions providers as a first step in learning about IT. Another 28% reach out at the start of the buying process. This means that nearly two-thirds of LOB managers are speaking directly to IT suppliers at the earliest stages of solution consideration.
There are three primary reasons for this. The first stems from who pays. According to the IDC survey, around 27% of IT projects are funded out of departmental budgets, rather than the company IT budget. While this number is only 15% in the Czech Republic and 17% in Hungary, it soars to 38% in Romania and 39% in Poland (in North America, this number is even higher). It stands to reason that when your own money is at stake, you will take the lead in learning about any given solution, even if you do not lead its implementation. This budgetary split is higher in countries where IT is relatively less developed, suggesting that IT departments in Romania, Poland, and Russia may be so focused on administration and systems management that it leaves them less time for working with business leaders than IT departments in the Czech Republic, Hungary, and Slovakia (related IDC data from the Middle East and Africa corroborates the CEE findings regarding less developed markets, with LOBs in the region accounting for well over half the funding for IT projects on average).
The second reason for LOB leaders reaching out to IT suppliers relates to complexity. Suppliers worth their salt have worked with scores or even hundreds of organizations. They have encountered multiple compatibility issues and helped their customers solve a variety of business problems through the use of IT. Sure, those same IT suppliers will say that their solutions are the best, and overly aggressive salespersons are likely to spend too much time pitching their products. But anecdotal evidence suggests that many LOB managers are willing to put up with this (within limits), to take advantage of supplier expertise. Despite the braggadocio that may come with it, a call to a supplier is a great way to cut through the noise of marketing collateral and endless search engine results to get quick and cogent replies to specific questions.
Use the Hype – Even If You Don’t Believe It
The third reason why LOBs bypass CIOs is the influence of increasingly tech-savvy LOB managers. When exploring a cutting edge innovation, people generally like speaking to the companies championing it. According to the IDC survey, LOB managers are particularly familiar with IT innovation as it pertains to analytics and all things mobile. This makes sense. Analytics has been around for decades, and is widely used in multiple areas from finance and accounting to production to sales and marketing. In contrast, smartphones are as personal as they are ubiquitous. They condition users to think that there is an app for pretty much everything, and that apps can be easily downloaded and plugged into existing hardware and software. Smartphones are also the primary means for checking email, reading and posting on social media, surfing the internet, and using personal planners (as well as playing both interactive and single-player games). They are a bridge to imagining how smart objects and devices might work.
Hype is also an important contributor in giving LOB leaders ideas for further development. The Internet of Things (IoT) has seen tremendous hype in the past couple of years, and around half of the LOB managers surveyed in CEE now claim familiarity with the topic. Of those claiming familiarity, more than half state that IoT is important or very important to helping them achieve business goals. Slightly less than half of those surveyed also claim familiarity with natural interfaces and robotics. In addition, depending on whether you want to say the glass is half empty or half full, more than a quarter report familiarity with cognitive systems, content-rich systems, and the quantified self. Finally, hype almost always comes from the specialist firms associated with it. Instead of general statements about cognitive systems, for example, hype in the form of media reports, white papers, and conference presentations almost always attach “remarkable success and innovation” to specific IT suppliers, and rarely to in-house IT teams.
Bring Your CIO Along for the Ride
Global and forward-looking IT suppliers started working LOBs into business development strategies years ago. More recently, they have changed their approach. Rather than ABC salespeople, many IT firms now enlist technical experts and solution storytellers as primary points of contact for prospective clients looking for persuasion and information on how best to implement solutions. Although technology experts mix sales messages into their presentations and freemium consulting engagements, for the most part, they are not focused on closing deals, which significantly adds to their ability to engender trust among potential clients (the current author personally observed a rep from a global IT supplier explicitly telling a government CIO that a given solution was not yet ready to handle their stated needs). Moreover, these technical experts often serve as a vital gap between business and IT leaders.
Smart CIOs know that their teams cannot be all things to all people. Rather, IT teams must prepare a platform upon which business units can innovate – connecting disparate solutions to ensure a user experience that is as seamless and useful as possible. The recent IDC survey supports this view. More than three-quarters of LOB decision makers in CEE say that their relationship with IT is either supportive, where IT teams take requests and proposals seriously, or cooperative, where IT and business units work together on an ongoing basis.
Look at the Present to Know the Future
Given the accelerating pace of technological development, IT departments will need to increasingly focus on business enablement rather than on specific business solutions. Even those enterprises able to maintain teams of developers will need to open their APIs to third-party providers brought in by business units. According to IDC’s Worldwide Semiannual IT Spending Guide: Line of Business, the contribution of LOBs to IT spending — a key indicator of LOB influence — will only increase, even where it is already high. For instance, in two of the world’s most developed markets, the USA and Canada, it is already around 58% and will jump to around 62% by the end of 2019.
LOB leaders, often with support from IT leaders, will need to increasingly demand educational material, meetings, webinars, and presentations from the technology experts of IT suppliers. IT suppliers must be prepared to establish (mostly free) consultancy competencies, and focus not only on installing and expanding IT solutions, but also on presenting business cases and planning technology roadmaps — and they do not need a CRM to tell them this.
This article is based on the recent IDC survey Collaboration Beyond Borders: How non-IT Decision Makers Approach IT in Central and Eastern Europe and the IDC Worldwide Semiannual IT Spending Guide, which identifies the source of IT funding for sixteen verticals and multiple technology areas.
Mark Yates is a research manager with IDC. He is based in the Czech Republic.
IDC leads the innovation discussion through events, research, and consulting. For nearly five decades, it has been giving IT and business professionals data and insight to make strategic decisions. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Learn more at www.idc.com.
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