UPDATED 17:46 EDT / MAY 14 2023


How technology service providers can raise their relevance in 2023

Economic challenges that include inflation and the looming possibility of a recession continue to create uncertainty in technology markets. Yet despite recent turbulence, a recent Gartner Inc. survey found that 72% of high-tech leaders have plans to grow revenue in 2023, and nearly half of those leaders believe they will be able to outperform their competition this year.

Uncertainty changes customer priorities and values – including the relevance or fit of a technology product or service. Outperforming the market amid turbulence requires strong market connections, and more importantly, highly relevant solutions and experiences.

To maintain and strengthening product relevance, technology service providers must adjust their value promise and position to customer context. This requires providers to proactively manage their relevance in three situations — the now, the near and the next.

The now: Raise the relevance of current messaging and marketing approaches

The “now” describes current market conditions, context and outlook. Leading in the now requires tech service providers to push sources of competitive advantage — particularly those relative to economic conditions. Information technology spending is projected to continue increasing through 2023, but Gartner research has found that there is no clear pattern as to what spending areas organizations plan to increase or cut. Technology service providers must urgently raise their relevance to remain a budgetary priority.

To do so, first gauge the immediate impact of economic turbulence and the potential for a recession. Review the installed base and pipeline to identify potential actions to insulate the organization from turbulence. Listen to customers and prospects to understand where they see their current context, what they are uncertain about and how values have changed. Evaluate your current product set, its promised value and its intended business outcomes against this context.

Measure current conditions against the company’s future ambition and market position. Focus on ideal customer profiles, as a change in context alters the relative potential of different customer and market segments. Adjust sales and product messaging to improve relevance.

The near: Have a plan for anticipated future changes

Relevance erodes with time and change. The “near” term defines that period of change, often the next three to nine months. While leaders always compete in the now, they must also keep their eyes on potential changes in the near term. For example, if a competitor announces poor earnings and lowers guidance, that could foster pessimism in the industry.

To maintain or create relevance in the near term, actively monitor key customers, industries and competition for signs of change. Follow press releases and earnings announcements and news of large or significant deals. Finally, monitor your own pipeline and customer sentiment. Develop scenarios with defined triggers and outlined responses for changes that would impact market structures, buyer plans or buyer commitments. For example, consider reaffirming commitments to key customers in industries whose outlook is darkening.

Mobilize for change in product, go-to-market investments or other priorities in situations where the change in context or outlook appears significant and structural. This requires discerning the difference between cyclical challenges that will pass with time and sector challenges that will endure. Keep the organization prepared to respond to changes in context. In times of turbulence, expect to move between the now and the near, but never lose sight on positioning for the next economy.

The next: Strengthen relevance when turbulence subsides

Leading companies influence and build relevance for the future. Leaders work to create the market position they want by incorporating their next ambition in decisions and actions. Others take the market position they are given. Using turbulence to strengthen the organization’s relevance will influence the organization’s position when that turbulence subsides.

Technology service providers can raise future relevance by defining their ambition and desired position with customers and in future markets. Avoid platitudes like being a “trusted partner” or “market leader” by focusing on what customers will notice and value in the future. Act in the now and the near to get those points across.

Test current product plans and messaging against future trends and values, such as the increasing power of business buyers and the acceleration of artificial intelligence, cloud and digital solutions. Adjust your ecosystem, partner network and go-to-market approaches for trends toward market consolidation and competition based on a network of companies. Evaluate the business and engagement models used to attract customers and monetize the value created.

Ongoing economic turbulence and the potential for recession create uncertainty. Although enterprise technology spending is not expected to decline significantly, the context behind investment decisions will change. Buyers will make investments they consider the most relevant to their situation and future strategy. Technology service providers must act fast to raise their relevance in the now, the near and the next to stay ahead of market forces.

Mark McDonald, Ph.D., is a distinguished VP analyst at Gartner Inc., responsible for the research focused on the application of technology to business, its products and services. He wrote this article for SiliconANGLE. He and other Gartner analysts will be presenting additional insights for technology executives at Gartner Tech Growth & Innovation Conference taking place June 14-15 in San Diego, California.

Image: geralt/Pixabay

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