As Aussie CIOs cut vendor ecosystems by 20%, here’s how to stand out

ADAPT’s recent GTM Workshop provided a deep dive into the Australian technology landscape, drawing on insights from ADAPT’s interviews and surveys with over 1,000 executives (CIOs, CISOs, Heads of Data, Cloud & Infrastructure) in technology buying groups to assess their priorities, initiatives, and barriers to success since the start of 2024. 

With 70% of CIOs aiming to reduce their vendor ecosystem by over 20%, the workshop explored what they need from vendors and what defines a strategic partner.  

Key insights shared by ADAPT experts highlighted challenges such as overcrowded markets, the need for differentiation, and the imperative of aligning with customer objectives.  

The session also addressed AI readiness, data maturity, and the essential pillars for a successful technological modernisation, emphasising that vendors must become indispensable partners rather than mere transactional entities. 

Decoding the CIO landscape: challenges and opportunities

The Australian market is undergoing a period of heightened complexity, competition, and budget constraints. ADAPT’s CIO Edge Surveys, involving 171 CIOs, show that a significant 70% of CIOs plan to reduce their vendor ecosystem by 20%. 

Jim Berry, Founder & CEO at ADAPT, highlighted the main hurdles to growth in this environment: overcrowded markets, limited customer budgets, and gaps in sales team capabilities. 

The need for outcome-led engagement 

Jim observed a common trend among vendors: they often lead with their product offerings instead of presenting clear, outcome-driven strategies.  

This results in clients misunderstanding the full scope of their capabilities, making it difficult for vendors to differentiate themselves in a crowded market.  

To address this, Jim emphasised the importance of understanding and aligning with customer objectives.  

Vendors who shift towards outcome-led engagement and effectively communicate how they can drive business value will be more successful in breaking through the market noise. 

Resource constraints and the AI opportunity 

ADAPT’s survey reveals a concerning trend: 64% of CIOs feel under-resourced and would need a 30% budget increase to meet their strategic goals.  

This resource constraint is further compounded by the rapid rise of AI, which, despite its potential, is adding another layer of complexity to an already challenging environment. 

ADAPT also found out that only 30% of organisations are adequately prepared for AI, highlighting a disconnect between the AI hype and the reality of its adoption. 

However, this gap also presents a prime opportunity. The increasing demand for AI capabilities, even amidst unpreparedness, translates to a massive growth curve in infrastructure.  

CTOs surveyed by ADAPT anticipate a 34.5% increase in compute needs over the next two years, indicating a substantial expansion opportunity for vendors in this space. 

It’s crucial, however, to approach AI conversations with authenticity and a deep understanding of its role in your offerings, as clients are becoming increasingly discerning and are quick to dismiss superficial claims. 

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Tackling hurdles to reach CIOs

Anthony Saba, Executive Director of Research & Advisory at ADAPT, presented findings from ADAPT’s CSO Survey that highlighted critical barriers sales leaders face when engaging CIOs, particularly in a climate of economic pressure and technological advancement.  

Sales teams are grappling with an overcrowded market, struggling to capture executive attention, and facing limited access to C-level decision-makers.  

Key challenges include the time-consuming process of finding buyers and building a pipeline, effectively communicating the business value of their offerings, and standing out in a crowded market. 

The impact of vendor consolidation 

The situation is further complicated by the fact that CIOs are actively consolidating their vendor relationships. 

This means vendors must demonstrate a clear ROI and position themselves as strategic partners, not just product vendors. 

Anthony emphasised also that many vendors fail to adequately support CIOs in articulating the business case for their solutions.  

To overcome this and thrive in a resource-constrained environment, vendors need to shift their focus towards outcome-led engagements

By understanding and addressing the specific pain points of CIOs, and clearly demonstrating the value they bring, vendors can differentiate themselves and secure their position as indispensable partners in the eyes of their clients 

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Industry leaders on adapting to changing buyer expectations

In a panel session moderated by ADAPT’s Senior Research Director Matt Boon, industry heads Dan Cox, Chief Technology Officer at Interactive, and Meg Santos, Head of Enable/Fujitsu at ServiceNow APAC highlighted the increasing challenges of competing in an already saturated market.   

Dan noted that larger enterprises are facing more complex decision-making structures, making it more difficult for vendors to engage meaningfully.  

He also pointed out that decision-makers are now more cautious about investment risks, with around 60% demanding clear evidence of ROI before considering new technologies.  

Meg Santos, Head of ServiceNow at Fujitsu APAC, discussed the shift in customer expectations.  

She shared that customers are looking for personalised, outcome-driven engagements rather than generic product pitches, especially when 58% of surveyed executives indicated a preference for vendors who demonstrate a deep understanding of their industry challenges.

She also mentioned that ServiceNow’s clients are increasingly prioritising agility in vendor partnerships, as 45% stated they favour partners who can adapt to evolving needs.  

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Key actions for tech vendors

To thrive in Australia’s dynamic IT community, tech vendors need to adapt their strategies and approaches.

Based on the insights shared during the workshop, here are key actions vendors can take to engage more effectively with CIOs and position themselves as strategic partners:

1. Prioritise outcome-driven solutions: Shift the focus from product features to showcasing how your solutions address specific business pain points and deliver measurable ROI. This approach aligns with the 60% of decision-makers who require evidence of ROI before considering new technologies.
2. Demonstrate industry expertise: Tailor your messaging and solutions to resonate with the unique challenges and priorities of specific industries. This approach is crucial, as 58% of executives prefer vendors who deeply understand their industry’s nuances.
3. Embrace flexibility and adaptability: Foster agile partnerships that can evolve alongside your clients’ changing needs. This adaptability is valued by 45% of executives who seek partners capable of navigating the dynamic technology landscape.
4. Facilitate the business case: Actively assist CIOs in building a compelling business case for your solutions, addressing budget constraints and demonstrating clear ROI. This support is essential in a climate where 64% of CIOs feel under-resourced.
5. Become a trusted advisor: Go beyond product selling and offer strategic guidance and support throughout the customer journey. This approach aligns with the 70% of CIOs seeking to consolidate their vendor ecosystem, favouring partners who offer comprehensive solutions and long-term value.

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