4 tactics that put data ahead of drama when making IT procurement decisions

Emotions, assumptions and biases won’t help you make the right choices

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With IT budgets on the rise, and the average company spending 5% of its revenues on IT, according to one study, billions of dollars are being spent each year on IT procurement.

As an IT professional, your job may involve not only determining which solutions are right for your company, but also communicating those needs to senior management. But with the amount of marketing hype and information (not to mention potential misinformation) coming from product vendors and the media, this often becomes a daunting task. Many times, senior managers fall back on fear and other emotions when considering IT purchase decisions, rather than relying on empirical evidence.

We’ve spent the past three years examining the many ways in which businesspeople misinterpret information and identified four tactics that may help you keep your leadership team focused on the data when it comes to IT procurement:

1. Understand the power — and danger — of emotions. Your CEO walks into your office one morning and asks what you’re doing about data breaches. He’s worried that 90% of companies say they’ve been hacked, and that there have been more than 75 publicly disclosed data breaches that involved 1 million or more records in the past decade.Or perhaps he’s concerned about the current ransomware threat that is disrupting entire businesses by encrypting their computer systems and forcing firms to pay for the decryption key. Security is an emotionally charged, top-of-mind issue, whether it’s ransomware, credit card theft or state-sponsored hacking, and product vendors often use this fear to try to make a sale. But just because high-profile security breaches make headlines doesn’t mean that your company is a likely target for those types of attacks. Are you a global bank, or a corner doughnut shop? Do you have PII, PHI or other data that hackers want? What is the likelihood of getting hacked for your company, and what are the most likely methods? If there is a security breach, what is the risk for your company? Will your CEO see the threat as more manageable if he realizes that known vulnerabilities may be a top cause of exposure to data breaches? It’s important to separate the fear from the data and take a close look at the facts. For example, that claim that 90% of companies say they’ve been hacked is based on self-reported data from a Web-based survey. By accurately predicting the true risk, magnitude, source and target of potential hacks, you can work with your CEO to focus your security efforts more effectively.

2. Use data to counteract preconceptions. Cloud computing can offer a wealth of benefits, from lower costs to greater flexibility, availability and scalability. And yet your organization’s leadership may be concerned about putting the organization’s data and resources in a location they cannot visit. Why? While some people may question the security of data in the cloud, consider the emotional factors at play. Many people simply have difficulty putting their trust in something that they cannot see or touch. You may not share these feelings with your managers, but it’s important to acknowledge them — and focus on the data — in order to build consensus and make your case. What are the availability metrics for compute and storage solutions? How do the security protocols and controls of the cloud provider compare to those you follow on-premises? Getting data that directly addresses these questions may help overcome any emotional resistance.

3. Don’t let leadership get distracted by correlations. Many new technologies outperform the ones they’re replacing. But a new product isn’t better because it’s new. The relationship between when a product was launched and how well it works is simply a correlation. Yet in data analytics and other fields, a CEO or senior manager may assume that newer is better and tell you to throw the latest technology at whatever problem you’re trying to solve. As an IT professional, you can remind leadership that newer technology is not always better in every way (if it was, nobody would ever write with a pencil). In fact, for IT, bugs and compatibility issues often make the latest software a poor choice for many companies. When it comes to seeking improved performance in new technology, for example, you can point out that there are often multiple causal factors — a more powerful chip, faster software, etc. — that may each play a role. Perhaps most importantly, you can guide managers past the “newer equals better” correlation and focus on which factors will impact the problem you’re trying to solve. Benchmark various solutions if time allows, then examine the data to determine which works best. Get your best people to weigh in on the technology in question. In the world of data analytics, for example, an experienced engineer’s approach to processing data can dramatically reduce processing time on existing hardware and software, which may make the big data solution the vendor is pitching you less attractive.

4. Beware of enthusiasm surrounding the next big thing. A senior vice president forwards you a research report claiming that “The Internet of Things Will Thrive by 2025” and asks for your suggestions regarding investments in new IoT technology. But before you start working on your report, consider the emotions that may drive people to put faith in predictions. People don’t like uncertainty. We want a crystal ball — or, at the very least, an article written by experts — telling us what to expect. Predictions, however, typically involve at least some level of uncertainty. If a sunspot fries the electric grid, for example, it may be another 50 years before the IoT is thriving. Of course, as with most data, it’s often important to understand where it comes from. In the case of the IoT study, for example, the claims are from an opt-in survey — which raises a number of questions: Who is being surveyed? What motivations might the respondents have in giving (or not giving) answers? Were the questions structured to allow for the types of nuanced answers that a complex topic such as IoT might spur? The conclusions may very well be valid, but these types of questions should at least give a manager pause and help you temper the initial enthusiasm regarding these types of predictions.

Emotions and human nature will likely always play a role in decision-making. But it’s critical that you are able to recognize when key information is being ignored, and know how to bring the conversation back to what matters — the data. By using data to drive your procurement decisions, you can often save your company resources, give your organization a competitive advantage and advance your career. 

John H. Johnson, Ph.D., and Mike Gluck are the authors of EVERYDATA: The Misinformation Hidden in the Little Data You Consume Every Day.

This story, "4 tactics that put data ahead of drama when making IT procurement decisions" was originally published by Computerworld.

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