The changing buying landscape

Of the Fortune 500 companies that existed in the year 2000, only 47% of those exist today. That’s over half of some of the largest companies in the world do not exist as they did in just over 20 years.

The changing buying landscape

Change is not new

In the past we would go through periods of change. Often something would prompt the change. Sometimes this prompt was a positive force as in new technology or new innovative ways of doing things and sometimes it was negative as in a change in regulation or legislation. We would go through a period of change and then things would settle down.

The old way of buying is not fit for more modern business

What is new about change is the pace and the fact it is constant. The old buying process is too slow and It doesn’t future proof our business.

The old process (from the trenches)

  • Identify an issue or react to a problem
  • Take it to the appropriate committee, e.g. the systems steering committee
  • Committee asks for a Feasibility study and impact analysis
  • Project proposal is produced including review of marketplace and initial budget estimate
  • We go to market 
  • Evaluate and select preferred supplier
  • Negotiate and sign contracts
  • Detailed project plan identified
  • Solution implemented
  • Go live

Footnote – This process can take as long as two years, depending on the complexity of the issue and solution. Often by the time we go live the solution is out of date or the issue has changed. By the time we go to market we are over 50% of the way through our buying process, often knowing what we want, from who and for how much.

We buy Change

We don’t buy new solutions or embark on new projects because we want to, we do it because we have to. It is not about selling or buying for that matter, it’s about business improvement, change.

Future proofing

Innovation 

Technology is driving change at a pace never seen before in business and it’s scary. We used to have to change to keep up with the market but we now need to change to survive and thrive as our sectors are disrupted. This is a key reason Executives are involved in the buying process, most purchases now are strategic. It is not enough to evaluate offerings and select the most suitable. It’s not about whether it will work for us today but whether it’s flexible enough to work for us tomorrow and we don’t know what tomorrow will look like.

Execution Gap

The execution gap is the gap between strategic plans and operational plans. I.e. Often the executives will produce a 3 to 5 year strategic plan that will include ambitious targets e.g. doubling of revenue or profit margin. These strategic plans are great but too often the people running each function work off annual operational plans which target incremental growth. This means we are planning to fail i.e. if we hit our operational targets we will not deliver on our strategic plan. 

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By Declan Tyrrell | Sales Coach & Facilitator

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