Six Areas of Opportunity for Partners When the CIO & CFO Can't Stop Bickering
Everyone knows that the digital transformation holds big opportunities for the channel, but a new report from Forbes Insight and Dell EMC has some specific insights that may help partners identify where their best chances of success lie.
As responsibility for enterprise tech shifts from belonging solely to the CIO to being shared by lines of business, it generates conflict between IT and other departments. The report specifically studies the conflict between the CIO and the CFO in enterprise technology management and the impact it has on organizations’ ability to navigate the digital transformation while staying agile and forward-thinking.
While the report is geared toward large enterprises with in-house IT departments, it also highlights significant trends that play right into partners’ sales strategies. Click through to see The VAR Guy’s top six takeaways from the report for channel partners.
Don’t get cocky and think just because some CIOs aren’t taking more responsibility for achieving business goals that applies to all CIOs. In fact, many enterprises are broadening the scope of IT and elevating it in reporting structures…and giving rewards for success. Sixty percent of CIOs report receiving rewards for helping the business succeed. That’s a pretty big incentive for in-house teams to step it up and give you a run for your money.
But not everyone can afford an in-house CIO, at which point the partner becomes the outsourced CIO. If you’re playing this role with your customers, it’s green fields, baby. Nearly half (42%) of the survey respondents say that CIOs have a direct line to the C-suite by reporting directly to CEOs and COOs, which would bypass the CFO kerfuffle entirely.
For example, GE reorganized its reporting structure and put an IT leader in charge of five essential business operations: supply chain, engineering, commercial, finance and services. If you can convince your prospects that you can take some of the heavy lifting off their plates, you might just have a straight line to C-suite gold.
As Jay McBain, analyst for Forrester, said in his keynote presentation at Channel Partners Evolution last week, the key to success in the channel of the future is “hyperspecialization,” in which partners evolve past industry verticalization to develop niche specializations in specific technological services. If you’re going to specialize, you might as well specialize in one of the top three investment areas for 2018 the report cited: big data platforms (77%), cloud services (76%) and social-media activities (72%).
As for sales tips, respondents said that the most attractive thing about cloud computing in all its delivery models — from private and public clouds to hybrid and multi-cloud architectures — is that it can exchange upfront CapEx for predictable OpEx and provide enterprises the agility to quickly spin up new services to match dynamic business needs.
As for big data, it’s all about efficiency. Respondents who said they were betting big on predictive analytics, big data, and business intelligence platforms are hungry for greater insights into the current and future requirements of customers to help them gain an edge over their competitors.
As for social media, it’s all about optimizing ad spend and automating certain marketing functions. Duh
So unless you’ve been tending bar in the Marshall Islands for the last couple of years (in which case, we kind of hate you), you know that selling on understanding your customers’ business goals is where the big money is at. In case you have trouble identifying what those are, the report very helpfully revealed the top three goals of enterprises investing in IT transformation.
Coming in at number three with 67 percent of the vote is reallocating funds to strategic business projects. Translation? Taking money from IT and giving it to lines of business. This may not sound good to IT solution providers, but there’s opportunity here. If organizations that traditionally had in-house IT departments decide to trim the fat, and you’re doing your job selling to LOB buyers…well, you do the math.
The number two slot, at 73 percent goes to being first to market with new products and services. This is a little trickier, but if you’re following everyone’s advice and hyperspecializing, you might be better situated to fill this need than you think. Go-to-market strategies are all about hyperspecialization and specificity in defining the exact solution their product or service provides, so read up on your niche and help your customers beat competitors to the shelves.
And the number one spot, coming in at a whopping 75 percent, is (drumroll please) reducing IT costs. Yeah, kind of anticlimactic. Sorry about that. But again, here comes opportunity for your sales team. Selling on price may not be the best way to start a relationship, but at least it’s an in.
If your prospect cites a need for short-term gains over long-term investment, go ahead and trot out this statistic: IT transformation leaders are more than 2X as likely to report they are ahead of their competition and 2.5X more likely to report return on investment in 12 months or less. In a business environment where every company is a tech company, no one can escape the competitive beating that’s coming to organizations that drag their feet when it comes to digital transformation. The CFO is all about the bottom line, so point out that every second they stand there and bicker with you over price is another second their competitors are inching ahead.
In addition, the report found that 85% of global executives plan to spend up to a quarter of their total enterprise budgets on IT Transformation in 2018, showing that if your customer isn’t investing heavily in digital transformation (via your services, of course), they’re already behind.
And don’t let them tell you that their industry is different. The study cites Panera Bread, GE Digital, Royal Resorts, Aviva and the U.S. Federal Communications Commission all as examples of organizations that now consider themselves digital enterprises.
If your pitch to the C-suite is prefaced by advising that conflict between the CIO and other LOB execs—especially the CFO—is hurting the business’s ability to collaborate on tech, you can start skipping that part. It turns out that 89% of senior executives acknowledge that significant barriers keep CIOs and CFOs from collaborating more closely on IT Transformation. Of course, if you ask them individually, the CIO and CFO cite different reasons for these breakdowns.
CIOs say that some CIOs have outdated attitudes about the role of IT in the enterprise, seeing it as just another cost center. But IT leaders admit that CFOs provide much needed direction as to the financial roles of the organization.
To better position their proposed architectures, the CIO—and the savvy IT solution provider—should present them as business use cases, specifically showing how each system advances the organization’s business goals. The proposal should include price comparisons and projected ROI for each solution under consideration, and convince the C-suite that the speed at which IT departments move is based on the financial and workforce resources they are given.
And if you’re worried about offending the finance head honcho, rest assured that most of them agree with the outdated attitude position. See? You’re already two steps ahead.
So by now you should have gotten the point that you need to know about your customers’ business in order to gain their trust and respect. But it turns out that enterprises are increasingly asking their IT leaders to essentially serve as a ‘trusted advisor’—a role the channel knows intimately.
A large majority of respondents in the overall survey say their organizations expect IT leaders to work hand-in-hand with the C-suite to capitalize on new opportunities and to help bring new products and services to market. This is a big play already for ‘emerging’ partners such as consultants and digital agencies, so traditional channel partners should be running to catch up.
In particular, four activities represent an area of especially close alignment between those the report designated as leaders and those it called laggards: business model development, strategic consulting, seizing new business opportunities, and rolling out new products. If you can prove your value in these areas, you can ride that ‘trusted advisor’ wave straight to the bank.
So by now you should have gotten the point that you need to know about your customers’ business in order to gain their trust and respect. But it turns out that enterprises are increasingly asking their IT leaders to essentially serve as a ‘trusted advisor’—a role the channel knows intimately.
A large majority of respondents in the overall survey say their organizations expect IT leaders to work hand-in-hand with the C-suite to capitalize on new opportunities and to help bring new products and services to market. This is a big play already for ‘emerging’ partners such as consultants and digital agencies, so traditional channel partners should be running to catch up.
In particular, four activities represent an area of especially close alignment between those the report designated as leaders and those it called laggards: business model development, strategic consulting, seizing new business opportunities, and rolling out new products. If you can prove your value in these areas, you can ride that ‘trusted advisor’ wave straight to the bank.
Six Areas of Opportunity for Partners When the CIO & CFO Can't Stop Bickering
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