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06/05/04
Buyers are Tougher and Smarter - According to a new Intellect Study New research launched today by Intellect and the University of Brighton has found that ICT buyers within UK businesses are not only tougher than their predecessors, but also unequivocally smarter.
The study, 'Procurement - Getting IT Right for Business', focused on the Financial Services sector as a vanguard in the adoption of ICT, and found that ICT buyers had significantly altered their procurement behaviours. The Smarter Buyer phenomenon emerged from the study as a step change in the way in which buyer organisations engage with the supplier industry.
Specifically it discovered that today's smaller IT departments, and increased demand for effective ICT to influence competitiveness, had created buyers far tougher and smarter in their relationships with suppliers, and their procurement processes. In addition, these buyers have a growing reliance on advisors, and seek to enhance their own capabilities by partnering with appropriate advisors at each stage of the procurement process.
According to the findings today's buyers are 'smart' to the idea of ICT services. Many are making a strategic shift away from the traditional isolated procurement of ICT systems, as demand increases for solutions which are business driven and value focused. In addition, these smart buyers have become better at the business of outsourcing their systems and processes, with buyers at the highest level reacting to the business cycle; outsourcing what they perceive to be non-core elements of their operations.
The study also found that ICT procurement processes are more disciplined and that buyers are ‘tough’ in their interactions with suppliers. This comes as a result of tighter internal controls and the increased role of internal procurement functions in supplier engagements. In addition, buyers are demanding increased intelligence from suppliers to support their focus on becoming effective procurers of services. This includes gaining increased knowledge of how ICT services can meet their specific business needs, and of the procurement processes required to attain such a service.
Stephen Flowers, Senior Researcher at Brighton University CoPS (Complex Product Systems) Innovation Centre said, "This study points clearly to a distinct step change in the way buyers within the Financial Services sector procure ICT systems and services, and to the birth of a new Smarter Buyer Phenomenon. This sector is a vanguard in the adoption of ICT and indicates that the same trends will soon begin to emerge in other sectors. The findings confirm that the balance of power has shifted significantly in favour of the buyer, and that these new Smart Buyers have evolved to recognise technology’s role as the enabler of a more competitive business." Beatrice Rogers, Head of Private Sector at Intellect said, "The move towards ICT services, and away from ICT systems, is fundamentally changing the entire procurement process and in order to remain successful suppliers will need to ensure that they focus on re-shaping their internal process and re-building their external relationships."
"Suppliers must respond to this emergence, and must do so without delay. Successful suppliers will be those that acquire a deep understanding of the implications of growth in buyer power and shape their responses to the demands of the marketplace."
Notes for Editors University of Brighton's CoPS Innovation Centre The CoPS (Complex Product Systems) Innovation Centre is a joint venture between the University of Brighton Centre for Research in Innovation Management (CENTRIM) and SPRU - Science and Technology Policy Research (University of Sussex) and. It receives its core funding from the Economic and Social Research Council (ESRC) and will raise additional funding from industry and government.
The aim of the Centre is to make a fundamental contribution to our understanding of complex industrial products, systems, constructs and networks and to contribute its findings to industrial partners, policy makers and the academic community. The centre provides an umbrella for world class UK research in the CoPS area and links up with several leading international research groups working on similar issues. www.cops.ac.uk
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