April 11, 2009

8 ways to win over IT buyers in a downturn

The economic downturn has resulted in IT budgets being slashed and many key projects being delayed, postponed, or even scrapped.

As a consequence how organisations are buying and implementing IT has changed, with 8 important implications for the way organisations are selling.

1. An immediate payback - most customers are delaying making decisions on any project that cannot demonstrate an immediate pay-back. They want to see results fast, or solve an immediate problem and they won't just take the vendor's word for it. They need evidence, or more to the point justification that is both quantified and verified.

2. Cutting the cost - there is widespread re-negotiation of contracts, with customers seeking to cut back on rates, project days, etc. With fewer new projects starting and increased vendor competition, suppliers have no choice but to adhere to customer requests for cost reductions.

3. Sharing the risk - vendors are having to consider risk - reward based pricing in order to revive stalled projects. But how do you reduce uncertainty about the level of risk, or the likelihood of reward - you need ask yourself this question.

4. There is Zero tolerance for project over-runs, or delays. Tighter control of spending and more disciplined project management of initiatives ranging from migration to virtualisation. This has given renewed emphasis to agile methodologies of project delivery, including regular iterations, or releases.

5. Phased implementations - increasingly cash strapped and risk-averse customers are looking to break down major initiatives into bite-size chunks that are both easier to manage and easier to fund.

6. New licensing models - in this era of IT cost cutting anything goes. Vendors are 'going back to the drawing board' with software/hardware investment , service rates and the timing/staging of licensing renewals under review.

7. Point solutions - in this present climate few IT managers and directors are out to change the world, or even their major systems. The focus has turned to point solutions, that will solve an immediate pain. Of course, these solutions must easily integrate with existing and future technologies.

8. An end to the Big Vendor bias? 'We only buy HP, or IBM' is something that vendors are hearing less these days. The trend towards consolidating all technologies with a single vendor is dead. Even if this had proven successful, the budgets are not there for it at present.

Ray Collis - sales actvity and sales effectiveness

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