Making successful decisions: Technology Purchase Influence Networks

There can be few more important IT issues—for both large corporations and the vendors that service them—than making major technology purchasing decisions successfully. While technology is a massive expense for organizations, this money is often not well spent. To address this critical issue, CNET asked me to do a research study on this topic, which I did with Rob Cross of the Network Roundtable at the University of Virginia, Andrew Parker of Stanford University, and key CNET executives. Here is the link to the full CNET report on technology purchase influence networks.

Organizational network analysis is an immensely powerful tool, which we wished to apply to understand better how large technology purchasing decisions get made. These kinds of decisions are not made by individuals, they are made by a range of people within the technology and business sides of organization, using both formal and informal decision-making processes. As such, it makes eminent sense to use a network approach to understand how these roles are combined, what inputs they receive in the decision-making process, and what the roles are in this process of vendors and other external parties. We also wanted to uncover the vital differences between successful and unsuccessful technology purchasing decisions, and what organizations can do to more consistently make successful purchasing decisions. We surveyed 289 organizations, and for each one uncovered the influence networks that supported a major technology purchasing decision made over the previous 12 months. The technology purchases covered spanned enterprise software, servers, storage, and voice over IP.

The figure below shows one of the diagrams from the report, giving the combined network across all successful decisions.

Summary findings from the research include:

* The archetype for a successful purchasing decision is based on a strong IT Director/ IT Manager nexus that is well aligned with business executive roles.

* Input from selected external parties support successful decisions.

* Involvement from other external parties, especially vendors, yields mixed results.

* Unbalanced involvement of IT Technical Support is strongly correlated to unsuccessful decisions.

* Getting financial and business input from the CFO strongly supports decision success.

Go to the report for far more detail on all of these findings, and on the key differences between successful and unsuccessful decisions. I will be presenting with Ted Smith of CNET on the study, and more generally applying network approaches to generating revenue, enhancing relationships, and improving decision-making, at the Network Roundtable conference in Boston next week.

I am very interested in taking the findings from this research into new areas. Immediate possibilities include working with organizations to uncover their internal influence networks and enhance the success of their major purchasing decisions, working with vendors to identify ways of adding value to the decision-making of specific clients or client segments, and applying and adapting the influence network methodologies we have developed to other areas of purchasing and decision-making, potentially for consumer as well as organizational decisions. Definitely get in touch if you want to bounce around ideas on any of this. I’ll post here on new applications we find.