Buying technology -- a rational or emotional decision‾

01 Dec 2007

Buying technology is no stroll in the park. Even buying an everyday item like a mobile phone can be tricky. It's not just a question of price. Should you go for the one with the built-in camera‾ And a built-in music player‾ Come to think of it, do I really want a new mobile or should I go for a smart phone‾

If that's baffling, imagine popping down to your local Telco and asking for a new IP network capable of linking a head office, half a dozen warehouses, a manufacturing plant and three call centres.

There's a well-worn view that people buy things based on their emotions, and then justify that purchase based on rationalisation and fact. That might be the case when you buy a new cell phone, but can that really be true for IT procurement‾

After all, these contracts are complex dealing with multiple suppliers and products. In this converged world, just about every piece of hardware has to be able to talk to every other piece of kit. This is the domain of the jargon hunter in search of connectivity, interoperability and scalability. But that's not enough. There are maintenance issues and service contracts, SLAs and financing agreements.

Of course, customers are wising up to this. It would be wrong to imagine anything else. Their purchasing of IT and telecoms is much more sophisticated these days prompted by budgetary constraints, a desire for more joined-up solutions and the need to meet that all-important ROI (return on investment). Increasingly, the green agenda is forcing companies to think of the environmental impact of their purchases and looking at suppliers to ensure they meet certain criteria.

Buyers are far more aware of what they want and of the solutions on offer. The rise of the IT-savvy buyer - either through in-house expertise or through the appointment of external advisors - puts suppliers under much more pressure. This increased knowledge means that customers are better prepared to deal with suppliers. These knowledgeable buyers are demanding more for less, and are generally tougher in their negotiations. And where necessary, they are increasingly looking to outsource non-core areas. Why‾ Because technology is integral to their business and a major contributor to competitiveness.

But even IT-savvy buyers -- who carry out extensive assessments and evaluations before whittling down a number of potential suppliers to a preferred bidder -- have got to make a judgment at some point.

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