Spend Matters welcomes another guest post from NPI, a spend management consultancy, focused on delivering savings in the areas of IT, telecom and transportation.
A recent article by CIO shows the increasing influence that social networking sites like LinkedIn are having on the IT purchasing process:
"IT purchasing decisions can be daunting, but a new study by Forrester Research and LinkedIn finds that IT decision makers (ITDMs) are relying heavily on social networks to help them through the process.
The study, "IT Purchasing Goes Social," surveyed 400 ITDMs across a range of industries throughout North America and finds that 85 percent have used at least one social network for business purposes. More surprising, according to Mike Weir, head of category development at LinkedIn, is the extent to which ITDMs use social networks during the purchasing process.
"Social media is a critical source of influence across the entire decision-making process,' he says. 'Not just during the research phase. The days of people thinking of social media as just an awareness platform is gone--it's much more than that now.'"
If you're wondering just how significant of an impact social networking is having on IT purchasing, here are a few numbers to digest:
- 73% of ITDMs surveyed have engaged with a vendor on social networks
- 60% say that social networks have influenced their purchasing decisions
- The top reasons ITDMs use social networks for business are: to learn from trusted peers (58%); to quickly find information (40%); to gain relevant context to connect with vendors (37%); and to gain access to a broader network (49%)
For those of us in IT purchasing, these numbers aren't too surprising. Social networks provide objectivity – something that's sorely needed in the IT buying process. This is especially true in the negotiation phase, where there is tremendous disparity between the pricing and terms a vendor gives one customer versus what they offer the next customer. LinkedIn Groups, like IT Spend Management, provide a useful platform for networking with peers to gain helpful insights on complex negotiation points like product use rights, audits, and other business issues.
What will be surprising, however, is the role that social networking will play as IT buying becomes less centralized within sourcing and IT departments. Will social networking become even more influential vendor/buyer negotiations? What happens when your head of marketing starts scoping a CRM solution on LinkedIn, and sharing "leverage-able" information with a vendor? How can social networking help the buying process? How can it hurt it?
IT purchasing is evolving and the processes of the future will need to take these questions into consideration. As for now, how do sites like LinkedIn influence your IT sourcing process? Are you using these sites to benchmark vendor pricing and terms? How would you rate their helpfulness?
- Jeff Muscarella, EVP of IT, NPI