Connect with Today's Software Buyers
There are four new breeds of IT departments which software vendors must understand in order to improve sales.
By Steve W. Martin
Feb. 04, 2007
If you are involved in selling an enterprise software solution, you already know the importance of understanding the inner workings of the various departments within the prospective customer's company.
Your software might be purchased by the information technology department and used by accounting and human resources. It might be selected by engineering (with the IT department's help) and used by manufacturing. Or it could be selected by finance and bought by the IT department.
Almost every enterprise software purchase decision requires multiple departments to become involved. Therefore, it's critical to map out the interrelationships of the departments within an organization.
After researching today's buying process, I've identified four types of enterprise software buyers that software vendors must understand and communicate with effectively in order to make the sale.
Four Types of IT Buyers Today
Over the past five years, I have performed win-loss sales analysis studies for a wide variety of software companies ranging from start-ups to companies with sales over a billion. To complete these studies, I conducted blind surveys of the senior IT executives, mid-level managers, and low-level technical evaluators who had selected or rejected the software from the company for which I was completing the study.
While the purpose of these studies was to improve the sales force's effectiveness, interesting patterns of IT organizational behavior became apparent. These patterns supersede the standard hierarchical organization chart that salespeople and marketers have grown accustomed to studying.
Four models can be used to define the information technology's departmental interrelationships that will influence their buying behavior: departments are either Consolidators, Consulters, Responders, or Bureaucrats.
The four IT departmental types listed above have different orientations toward the operation of their departments. Most importantly, they buy software in different ways and for completely different purposes. It is important to understand that any department can be any type of buyer. For example, the IT department may be a Consolidator at one company and a Consulter at the next.
Sometimes, the type of department may be associated with a specific business goal. For example, the IT department may be a Consolidator when driving a project to complete Sarbanes-Oxley compliance and a Responder when asked to assemble information for a sales department-driven project.
Consolidators
Consolidators are IT departments that seek to increase their power, authority, or control within their organization. To grow their sphere of influence, they launch grand initiatives, major company-wide projects that affect the operations of other departments.
The planning and creation of a grand initiative are at the direction of the department's executive leadership (CIO, CTO, and VP of IT). This type of project does not percolate up from lower-level personnel through the chain of command; it is driven down from the top and out to the rest of the company.
The figure below illustrates a Consolidator's flow of power. In this example, the vice president of the information technology has decided to drive an initiative to move all applications and programs off the company's aging mainframe computers onto new, less expensive computer systems.
After making this executive decision, he mandates that his direct managers fulfill his wishes. These direct reports assemble teams to plan the project and evaluate the vendors. IT liaisons (who report back to the IT department) gather information from the various departments, schedule vendor demonstrations with departmental power users, and serve as intermediaries between the various departments during project implementation.
Business Investment by Type of Software
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Your software might be purchased by the information technology department and used by accounting and human resources. It might be selected by engineering (with the IT department's help) and used by manufacturing. Or it could be selected by finance and bought by the IT department.
Almost every enterprise software purchase decision requires multiple departments to become involved. Therefore, it's critical to map out the interrelationships of the departments within an organization.
After researching today's buying process, I've identified four types of enterprise software buyers that software vendors must understand and communicate with effectively in order to make the sale.
Four Types of IT Buyers Today
Over the past five years, I have performed win-loss sales analysis studies for a wide variety of software companies ranging from start-ups to companies with sales over a billion. To complete these studies, I conducted blind surveys of the senior IT executives, mid-level managers, and low-level technical evaluators who had selected or rejected the software from the company for which I was completing the study.
While the purpose of these studies was to improve the sales force's effectiveness, interesting patterns of IT organizational behavior became apparent. These patterns supersede the standard hierarchical organization chart that salespeople and marketers have grown accustomed to studying.
Four models can be used to define the information technology's departmental interrelationships that will influence their buying behavior: departments are either Consolidators, Consulters, Responders, or Bureaucrats.
The four IT departmental types listed above have different orientations toward the operation of their departments. Most importantly, they buy software in different ways and for completely different purposes. It is important to understand that any department can be any type of buyer. For example, the IT department may be a Consolidator at one company and a Consulter at the next.
Sometimes, the type of department may be associated with a specific business goal. For example, the IT department may be a Consolidator when driving a project to complete Sarbanes-Oxley compliance and a Responder when asked to assemble information for a sales department-driven project.
Consolidators
Consolidators are IT departments that seek to increase their power, authority, or control within their organization. To grow their sphere of influence, they launch grand initiatives, major company-wide projects that affect the operations of other departments.
The planning and creation of a grand initiative are at the direction of the department's executive leadership (CIO, CTO, and VP of IT). This type of project does not percolate up from lower-level personnel through the chain of command; it is driven down from the top and out to the rest of the company.
The figure below illustrates a Consolidator's flow of power. In this example, the vice president of the information technology has decided to drive an initiative to move all applications and programs off the company's aging mainframe computers onto new, less expensive computer systems.
After making this executive decision, he mandates that his direct managers fulfill his wishes. These direct reports assemble teams to plan the project and evaluate the vendors. IT liaisons (who report back to the IT department) gather information from the various departments, schedule vendor demonstrations with departmental power users, and serve as intermediaries between the various departments during project implementation.
Business Investment by Type of Software
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