To understand the customer life cycle and buyer journey of the CIO or Head of Enterprise Applications when choosing a third-party enterprise software service provider.
CIO Purchase Journey
- According to the 2019 IDG Role & Influence of the Technology Decision-Maker Survey, CIOs remain the top decision maker for technology purchases.
- CIOs are "leading the charge from identifying the need for strategy (58%), to evaluating products and services (61%), and authorizing purchases (41%)."
- However, CIOs are losing some ground to line of business (LOBs) in the decision-making process, according to a recent survey conducted by Black Book, which notes that their purchasing power decreased from 71% in 2015 to a mere 8% in 2018.
- As of 2019, the corporate technology buying committee comprises 21 people, across tech and line of business (LOB). In terms of enterprise software, specifically, that figure jumps to 24.
- Most technology purchases take three-to-six months (25%) or one-to-three months (24%), while about 15% take over a year.
- The IT department most often (61%) does the research and makes a short list of vendors to explore; that figure increase to 72% if IT is the primary budget holder.
- When purchasing enterprise software solutions, seven pieces of research (e.g., white papers or research reports) are studied to help with the decision-making process.
- Fully 97% of IT decision makers (ITDMs) meet with vendors during their discernment process.
- When meeting with vendors, 62% of ITDMs are looking for information related to their specific business, while 58% want information to help them with their final purchase decision.
- The reason for purchasing a new enterprise software solution is typically to replace an existing system.
- In terms of third-party enterprise software providers, CIOs are looking for reassurance that the third-party vendor can "offer the same level of expertise as their enterprise software provider," according to research conducted by Nucleus Research on behalf of Rimini Street.
- Nucleus Research also determined that IT executives are looking for enterprise software solutions that will continue to be supported by the vendor once the company has it fully up and running, as many companies end up keeping legacy systems longer than intended, rather than upgrading, because vendor support doesn't keep pace with system changes.
- Nucleus also found that third-party vendors provide a cost benefit to their customers, noting that, "customers moving from license maintenance provided by their enterprise software provider to third-party support are typically able to at least halve their annual support spend."
- IT executives want "control of their application lifecycle and cloud migration plans," which can sometimes be achieved by using third-party vendors that allow them to stay with legacy systems.
Summary of Findings
CIOs remain largely in charge of IT purchases, including third-party enterprise software providers, but they do so with the input of an increasing number of influencers. The purchasing process tends to take from one-to-six months and involves reviewing at least seven pieces of research. CIOs or other ITDMs are looking for expertise, consistency, and support from third-party vendors.
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