Free Newsletters for the Channel
Register for Your Free Newsletter Now
July 5, 2017
By Carolyn April
Who’s buying what you’re selling today? The IT department? The CIO? The small business owner?
Any of those three is a good bet.
For decades, these job roles have been the prime sales targets for the clear majority of channel firms.
And they remain the predominant types of end customer buyers to this day.
But in the as-a-service world of cloud, the “typical” customer is no longer so typical.
Easy access to cloud-based solutions, a more tech-savvy workforce throughout customer organizations, and demand for business-oriented services has given rise to a new set of buyers and influencers: line of business people.
Today, you are as likely to sell technology solutions and services to the VP of marketing as you are to somebody in an internal IT department.
Same goes for CFOs, human resources directors, the VP of sales, or head of logistics.
A recent Gartner survey showed that more than half of the respondents from functional areas other than IT are involved in technology purchase decisions, and the rate of involvement appears to be increasing.
Meanwhile, IDC forecasts in a report that “worldwide corporate IT spending funded by non-IT business units will reach $609 billion in 2017, a rise of 5.9 (percent) over 2016.”
By 2020, IDC expects LoB IT spending to be nearly equal to that of the IT organization.
What does this mean for the channel?
Quite a bit, actually.
Dealing with LoB buyers is an altogether different experience than the more familiar interactions you have been having with an IT department buyer.
LoB are less about technical details and more about business outcomes.
And they sport their own vernacular based on their business function and the vertical industry they inhabit.
As a result, selling to LoB has implications for your entire channel business; everything from your marketing and lead generation efforts to sales strategy, staffing, training, and more.
To get a better handle on selling to LoB, I’ve come up with three key things you need to know about these new buyers.
The insights are based on my recent CompTIA research report, “Considering the New IT Buyer,” which was published in May.
1. Even if they aren’t the actual purchaser, LoB executives are exerting major influence on tech choices.
LoB executives may not have their own budget to buy technology for their department – though many do – but an increasing number of them have a seat at the table in deciding what solutions and/or service do get procured.
Consider what study respondents had to say about how the technology purchase process in their organization has changed over the past two years:
49 percent said the ultimate objective for technology is now more business focused
45 percent said ideas for tech purchases come from different areas at the organization
36 percent said more business executives are now involved in IT decision-making process
27 percent said the final decision is now made by a different group or person than the IT department.
What does that mean for the channel?
Clearly, it’s time to start talking to these LoB executives, regardless of whether they buy from you themselves or not.
By introducing them to your services and capabilities, you increase the odds that they recommend you to whomever in their organization does hold the purse strings.
2. LoB buyers have precious little familiarity with the IT channel
This goes to key point No. 1: LoB execs are relative newcomers to the tech-buying process, and as such, are mostly blind to the go-to-market world of the channel and distribution.
In other words, most of these buyers are not proactively seeking you out to sell them tech solutions and services.
In fact, many in today’s cloud-based scenarios are self-provisioning applications and other solutions for their departments.
Click, install, and ready to go.
But while self-service tech habits are a fact of life today, tech solutions still need tending in other ways that align with what the channel is good at: integration with other solutions, customization, security and compliance work.
Today, LoBs are relying mainly on internal IT departments, tech-savvy workers within LoB departments or, nobody at all for this management work, according to our study. And disappointingly, fewer than 10 percent of LoB buyers are using a third party to manage the technology they do use within their departments post-purchase.
(The caveat being that some LoBs may be unaware that a third party is managing their technology at the behest of their internal IT department).
Before we get too glum, the good news is that the channel has plenty of green space here to work with.
You might not sell the technology to the LoB buyer, but as an expert, you have a chance to become the ongoing steward of these solutions.
MSPs, consultants, and cloud-services providers are in a unique position here.
And for those channel firms that get their foot in door with LoB executives, the news is also good.
Consider that more than half of all LoB buyers that did contract with an outside firm to manage their IT did so on a regular or frequent basis, with another third reporting usage occasionally.
This suggests that once LoB executives gain experience working with an outside channel firm, they are mostly satisfied with the return on investment – and they stick with them. For the record, most of these LoB buyers (56 percent) worked with technology consultants, while 51 percent used an MSP and 24 percent hired a firm to manage their cloud assets.
3. LoB departments staff tech-related workers in their individual departments
The main reason LoB departments are making at least some of their technology purchase decisions independently is because their staff is tech-savvy and innovative.
In fact, exactly half said that their business unit employees’ tech abilities gave them confidence and insight to make department-specific technology decisions on their own.
It’s increasingly easier to see why. Not only has the consumerization of IT made most all of us more tech literate, LoB executives are making this fact a part of their hiring strategy.
Across the board, from finance to customer service to marketing, LoB departments are employing staff in job roles that can only be defined as technology-focused.
Here is your target market!
Just take a look at the types of jobs inside today’s finance/accounting business units:
44% Data analyst
40% Systems administrator
24% Database administrator
23% Business systems analyst
23% Security specialist
19% Software developer
19% Data scientist
15% Cloud specialist
This is not an isolated phenomenon.
Other business units such as marketing and HR are employing social media experts, content strategists and data analysts. All of this is evidence that working in technology today means working anywhere – not just for a tech firm.
From a channel perspective, perhaps the easiest inroad to selling to LoB is through these tech-oriented staffers.
Carolyn April is Senior Director of Industry Analysis at CompTIA. She has served as an analyst and editor covering the IT channel at titles including Channel Insider and VARBusiness, and Redmond Magazine.
You May Also Like
Cloud Computing News: AWS Loses Another Key Exec to Azure; Canalys, Vega Cloud, Hyve NewsFeb 23, 2024
Channel Futures Reveals 2024 Circle of Excellence InducteesFeb 23, 2024
Canalys Channel Leadership Matrix Names AWS, Cisco, HP Among 'Champions'Feb 22, 2024
CrowdStrike, SonicWall Cyber Threat Reports Highlight Attacks, Popular TacticsFeb 21, 2024