Gartner: Business Technologists Drive Funding for Tech Purchases Outside of IT

April 13, 2022

Seventy-four percent of technology purchases are funded, at least partially, by business units (BUs) outside of IT, according to a recent Gartner survey. Only 26% of technology investments are funded entirely by the IT organization.

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

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

“Gartner research found that 41% 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 the corporate IT department, literally anyone could be a technology buyer for their organization.”

Joe Marcaurelle, Inmar Intelligence Director of Product Strategy - Supplytech added, "Business unit spending on IT-related functions is likely to increase as organizations of all sizes embrace digital transformation. Cloud computing enables business leaders to develop integrated ecosystems that meet their objectives and increase visibility, while lowering capex investments and mitigating risks – particularly in the areas of cybersecurity and systems obsolescence. In a recent Forbes article, Inmar’s CEO, David Mounts, stated that ecosystems were essential for overcoming what he called “digital territorialism.”

For Inmar, cloud computing facilitates our PaaS (Platform-as-a-Service) offerings in Supplytech, Fintech and Martech. In Supplytech we are also seeing rapid growth in our SaaS (Software-as-a-Service) solutions, particularly in customer experience and returns processing. However, as Mr. Finkeldey points out, reaching the appropriate buyers and influencers has become more challenging. For example, post-purchase experience activities may fall under a number of departments such as supply chain, logistics, customer service, customer experience or sustainability. The secret to reaching the right decision maker(s) is understanding the prospect’s needs as much as their organizational structure.

The survey found that across large purchases in every major technology category, organizations take varying approaches to funding:

The most common funding approach for hardware, technology services and managed services is for IT to fund the entire purchase, followed by funding coming from multiple departments or BUs and IT.

The most common funding model for software and integrated solutions flip these two: Funding by multiple departments and IT is most common, followed by IT-only funding.

IT is providing at least part of the funding in 70% of the purchases studied.

Seventy-five percent of respondents using shared funding approaches experienced delays reaching agreement on the budget allocation between groups.

According to Akshay Sharma, CTO, Kovair Software, and former Gartner Analyst, “We agree with the Gartner findings that IT Funding from external business units will be more prevalent in the near future, until IT is totally self-sustainable. To be self-funded, IT needs to shift from a Cost Center to a Value Center, which Kovair uniquely enables, with it’s end-2-end Project and Portfolio Management capabilities additionally within our VSMP: Value Stream Management Platform, and iPaaS (integration Platform as a Service) solution set. The Kovair solutions help enable Industry 4.0, with governance, policy-controlled automation, with value-centric business outcomes. With revenue management, these platforms can help transition IT from a Cost Center to a Value Center, with the ability to generate an invoice for IT Services, IT Products, and IT API’s being leveraged.”

“High-tech providers need new approaches to identify not only whom to engage, but also how to engage B2B buyers across all BUs, with confidence that their approaches will be effective and their roadmaps compelling. Product leaders need to coach teams tasked with discovering budget availability to extend that research to also include the funding approach,” said Finkeldey.

Bob Bova, President and CEO of AccuSpeechMobile explained, "Organizations are tearing down silo mentalities when it comes to new technology and how it’s being paid for. New tech is branching out throughout the forward thinking companies and the funding and purchasing of these new solutions is being shared across disciplines in these organizations."

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