As I’ve stated before, when you look at some of Gartner’s research on buying that highlights data points like only 27% of the largest purchases made by survey respondents were high quality deals and that 54% of respondents expressed regret for nearly every subscription purchase they make, it is clear that the industry has a problem. As technology becomes increasingly important, these percentages should not be viewed as acceptable. They are failings—and the responsibility is shared across all parties in the industry.
I recently started sharing information on a new(ish) stream of Gartner research on Fusion teams – cross functional teams brought together to address a business issue/opportunity with technology as a key component of the planned solution.
For fusion teams to be successful in both delivering on their business goal AND protecting enterprise interests, they have to exercise sound digital judgment. Digital judgment is the set of beliefs, mindsets, and behaviors that enable fusion team leaders to effectively balance team with enterprise outcomes. Gartner’s research found that teams with leaders with sound digital judgment were 5 times more likely to achieve goals without introducing enterprise risks. I’d also hypothesis that those with great digital judgment are more confident decision makers and buyers.
But, as the graphic also shows, only 22% of fusion teams leaders have high digital judgment. That seems eerily similar to 27% high quality deals. A low number that needs to change.
In thinking about digital judgment, you have to start with the premise that people don’t intentionally make choices to increase security, compliance and other enterprise risks. At the same time, the traditional models for Governance, Risk, and Compliance were often not built with digital in mind—and may never have really been communicated broadly across the organization.
The secret involves rethinking GRC for digital. Start by broadening the awareness of GRC issues across the organization. Second, make experts in these areas available to distributed fusion teams. Importantly, these are not to be “GRC Police”, but instead informed collaborators to work with the team to find the right balance in solutions. Organizations that co-create digital governance find faster uptake in digital judgment. I’d suggest that these teams create “judgment checklists” that are used to make sure the right discussions and subsequent decisions happen.
And what about the provider community? I think there is a big role to play. Vendors should make digital judgment based recommendations as part of their sales process, encouraging the type of discussions that drive success and reduce the chance of rework or rejection of solutions (that vendors don’t want). Cultivating case studies and examples of how to exercise and incorporate digital judgment into solutions is also critical.
Digital judgment is a hot topic for me. In some ways, it’s like decision making. Too often, we all take for granted that we know how to do things right. Digital judgment can’t be assumed–for fusion teams or even for IT and GRC resources. Its a new game with new situations happening constantly. Building awareness of it in the corporate vocabulary and providing tools like checklists to help people do the right thing—which is what they really want to do anyway–is a win for everyone. It also, done right, should serve as an overall accelerator–reducing bad decisions and rework and becoming more comfortable to move fast the more it is exercised.
Are you building digital judgment across your org? Are you helping your customers exercise sound digital judgment?
The time to start is now.
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2 Comments
Hank, you said, “54% of respondents expressed regret for nearly every subscription purchase they make, it is clear that the industry has a problem.”
Are you referring to SaaS app subscriptions? If so, then please consider sharing additional insight on this topic. Here’s why I ask.
I’ve explored a hypothesis that vendor ‘Customer Success’ teams may lack a compelling business case for their offering, from a customer ‘business outcomes’ perspective.
Customers that decide not to renew will report that they don’t have the ROI tools they need to determine meaningful and substantive value. Therefore, the subscription cost is scrutinized.
FYI, I reached this point of view from several chats with SaaS app marketers that were consistently experiencing customer churn.
David,
The study for the 54% was specifically focused on subscription decisions (so basically anything in tech purchased as a service). More is in this earlier post – https://blogs.gartner.com/hank-barnes/2020/09/08/the-pessimism-problem/. In general, we found these pessimists to be more likely to downgrade, but were also more likely to renew even if they were not satisfied.
I think there is room for improvement on both sides. Certainly agree that Customer Success should be equipped to do more to support the customer in validating the business case that was used to make the decision (or build a case for renewal if none was used to purchase).
But there are issues on the buying side as well. Our research on enterprise psychographics shows that many organizations have poor decision practices and don’t put in the effort to assess value or put in the work to get value.
Our research found that nearly every renewal decision, even when people are satisfied, triggers a new “buying effort” where other suppliers are evaluated. I’d ultimately put it down to a shared issue for vendors and customers to invest a bit more time in decision making practices and clarity of goals with a follow on commitment to do what it takes to achieve those goals, and prove they have been met