74% of technology purchases financed by non-IT business units: Gartner

In November and December 2021, Gartner surveyed 1,120 manager-level respondents or higher in organizations with annual revenues of at least $1 million

According to a recent study by Gartner Inc. there has been an increase in the number of business technologists driving financing for technology purchases outside of IT.

According to the research, 74 percent of technology purchases are financed, at least in part, by business units (BUs) outside of IT, while 26 percent of technology investments are financed entirely by IT organizations.

In November and December 2021, Gartner surveyed 1,120 manager-level or higher respondents in organizations with annual revenues of at least $1 million in North America, Western Europe, and Asia/Pacific to understand how organizations are tackling large-scale enterprise technology procurement efforts.

“As technology becomes more important and embedded across the business, the dynamics of the procurement team continues to evolve. In the past, it was relatively easy to predict who buyers were, but that has all changed,” said Derry N. Finkeldey, research vice president at Gartner.

“Gartner research found that 41 percent of employees are business technologists, creating technology or analytics capabilities for internal or external business use and reporting outside of IT departments. In a world where most technologists work outside of the company’s IT department, literally anyone could be a technology buyer for their organization,” added Finkeldey.

The survey also found that organizations took different approaches to financing for major purchases in each major technology category.

The most common financing approach for hardware, technology services and managed services was for IT to finance the entire purchase, followed by financing from multiple departments or BUs and IT.

In the most common financing model for software and integrated solutions, these two are reversed: multi-department financing and IT is the most common, followed by IT-only financing.

ICT provided at least part of the financing in 70 percent of the investigated purchases.

75 percent of respondents using shared funding approaches experienced delays in reaching agreement on budget allocation between groups.

“High-tech providers need new approaches to determine not only who to engage, but how to engage B2B buyers across all BUs, confident that their approach will be effective and their roadmaps compelling. Product leaders need to coach teams tasked with discovering available budgets to extend that research with the funding approach,” said Finkeldey.

“Even as the role of business technologists grows, product leaders should not bypass central IT representatives, even when addressing an industry or industry-specific use case with an identified business champion, as IT will continue to provide at least partial funding in nearly all cases.” ,” the report said.

published on

Apr 14, 2022

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