Ethics trump innovation when it comes to choosing tech vendors

As digital transformation spend increases around the world — businesses are looking for technology vendors whose ethics and culture align with their own.
10 September 2020

Businesses want their partners to hold a steady course. Source: Shutterstock

  • While execs prefer well-known vendors, industry expertise and long-term solutions are top concerns
  • Surprisingly, culture and ethics are also significant considerations when it comes to choosing tech partners

Investments took a momentary ‘hiatus’ in most sectors this year, but the pandemic will only really be a glitch in a years-long trend in rising tech spend, fuelling a rich, diverse, and growing market for enterprise technology solutions.

In fact, the consensus is that remote working demands and new cloud dependencies have accelerated digital transformation adding a further shot of competitivity among the many solutions vendors waiting in the wings for budgets to relax once again. Despite the uncertainties caused by the COVID-19 pandemic, a majority of companies are planning to increase their digital transformation spend.

Pursestrings may be loosening, but the stakes of getting investments wrong are higher than ever. Businesses want a flush-fit from their partners, but among such an expansive ecosystem of sellers, what considerations are entering into their decision-making process?

A study based on responses by more than 3,000 executives by IFS across a broad range of industries found that industry expertise (32%) and long-term solutions (30%) were the top two traits sought by buyers — despite a propensity for execs at large businesses to jump in with “well-known” vendors.

Those considerations are unsurprising and understandable, considering poor advice from vendors tops the list of why digital transformation projects fail at 37%.

What’s unexpected, however, is that — as digital transformation spend increases around the world — businesses are looking for technology vendors whose ethics (29%) and culture (23%) align with their own. These considerations even trump innovation in the ranks for desirable vendor traits. And that suggests that a similar cultural view of the world is playing a larger role in a post-pandemic tech marketplace.

“The fact that a non-tangible such as ethics is ranked among the top three vendor traits is inextricably linked to the fact that poor advice from vendors was rated as the top reason for failure,” IFS chief customer officer Michael Ouissi said.

“Companies investing in technology should expect their vendors to adhere to sound sales and marketing practices based squarely in actual customer value.”

With a focus on previous experiences from past digital transformation projects, the study finds that budgets and timelines are two major pain points. Respondents indicate that failure in past projects makes management more reluctant to engage in future digital transformation efforts. Budget overruns top the list of reasons management may put the brakes on critical projects at 28% and 26% saying blown timelines on past projects have made management more risk-averse.

Ultimately, while it’s interesting that considerations like culture and ethics are factoring into decisions, these are part-and-parcel of end-users seeking a partner that they can trust, and trust to get the job done.

Further analysis of the findings shows that the success of these digital transformation projects primarily hinges on finding the right technological fit (44%) and establishing clear objectives (50%).

In fact, the top-three vendor trust factors highlighted by respondents are on-time delivery (44%), support before, during, and after project completion (41%), and delivering projects faster to value (35%).