Gartner: Most Tech Purchases Funded By Business Units Outside of IT

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 organisation.

In November and December 2021, Gartner surveyed 1,120 manager-level or higher respondents in organisations with at least $1 million in annual revenue in North America, Western Europe and Asia/Pacific to understand how organisations 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 organisation.”

The survey found that across large purchases in every major technology category, organisations 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.

“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.

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.