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Digital Transformation is Here: What this means For You

Digital transformation is not a technology initiative. At its essence, digital transformation is a business strategy. Business leaders understand that digital transformation holds the potential for real growth by fundamentally changing the customer experience. To be successful, digital transformation requires a strong partnership between business leaders and IT.

Initially, the transformation to digital started with cloud computing. Companies turned to cloud-based solutions as a quick way to get new business-oriented applications in the hands of their end users. Without the need to provision hardware or configure software, line of business managers and other non-IT buyers became key decision makers. Demand for new technology was suddenly focused primarily on improving the business and not creating more efficient IT operations.

Today, your customers have embraced cloud-based solutions. Now these customers are embarking on digital transformation that affect you in two distinct ways.

First, there is a growing demand for your products and services.

IT is no longer exclusively a cost center, but rather is increasingly seen as a revenue center. However, you’ll need to adapt your products and services models to meet new as-a-service consumption paradigms as demand is growing. It’s important to keep in mind that digital transformation means your customer is changing.

All IT sellers face critical challenges in this rapidly changing IT buyer environment. One critical challenge is around the buyer which now includes more than IT. There are 43% more stakeholders in every IT buying decision, which makes the selling job more complex and takes longer. Business CEOs, business unit leader, technical, CIOs, corporate IT, and financial CFO purchasing personas all have different points of value and you must appeal to each one. If there are seven decision makers, only two or three will be technical buyers.

Second, sales organizations are struggling to transform from product pitches to value selling. Buyers are seeking to understand the value of the vendor’s solution to their company. Yet, most sales people find having value outcome-oriented conversations difficult. Less than 10% of conversations today are around value. Often without such conversations, buyers cannot reach a decision.  The sales pipeline then gets stalled, negotiations begin, and deal sizes decline – sure signs that sales pros need the right content and the ability to access buyers to have value conversations. In effect, there’s a gap between buyer expectations for more value-focused conversations and proposals, and sales reps who still deliver traditional product-centric messaging. The bottom line: marketing and sales challenges.

The Internet Changes Everything

Buyers seek custom solutions that address their specific needs, a tendency that is directly attributable to internet purchasing. In effect, as consumers we want what we want when we want it. We know that we can find everything we need to know online. It is in this environment where marketing takes on heightened importance. Buyers eliminate nearly half of the potential vendors based on vendor marketing content alone, so it’s critical to reach buyers online with compelling marketing messages.

In light of digital transformation’s promise to positively impact business outcomes such as revenue growth, agility, innovation, and customer experience, IT buying has become more strategic. IDC notes that product solution lifecycles are moving from three years to five years, which makes the initial buying decisions larger and more significant. Thus, buyers are increasingly wary of making mistakes — they are becoming more risk-adverse.

So how do you overcome these challenges? Here are five best practices to develop business value-based sales conversations and strategies:

  1. Focus on business outcomes.
  2. Quantify the value of key elements of digital information, business agility, customer experience, and innovation.
  3. Elevate the customer experience.
  4. Automate the sales process to make a complex selling task easier.
  5. Integrate your program.

Each of these topics deserve in-depth treatment, which is why we’ll post additional blogs in the coming days and weeks. Look for these blogs to help guide you towards exploring business value tools and the improvement they can make to your sales conversations.

Randy Perry is vice president of IDC’s Business Value Strategy Practice, and Nancy Selig is research vice president of IDC’s Interactive Platform Services.

Randy Perry

Vice President, Business Value Strategy Practice

Mr. Perry developed and has led IDC's Business Value Strategy practice for over twenty years. As IDC's thought leader in promoting the financial benefits of IT, he has pioneered Return-on-Investment and cost of ownership methodologies and Business Value sales tools development and sales training, completing more than 500 studies over the past 10 years. He is currently working on multiple projects linking IT initiatives (cloud, mobility, BDA, social and IoT) to improving business outcomes such as increasing agility, improving customer experience and becoming more innovative; and quantifying the financial impact in terms of business metrics (revenue growth and lower operational costs).

Mr. Perry has more than 30 years of experience in strategic planning and consulting. He has spoken at industry seminars and has been published in North America, Latin America, Europe and Asia Pacific.

Prior to joining IDC, Mr. Perry was a senior consultant for JSA International, a strategic marketing and management consulting firm where he managed new technologies market consulting and mergers and acquisition projects.

Mr. Perry holds a B.S. in engineering from West Point.

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