The IT sourcing process often leads buyers through a labyrinthine landscape fraught with biased information and incomplete data.
The process, characterized by its protracted nature, exorbitant costs and superficial evaluations, frequently culminates in costly errors and antiquated solutions, according to a report from Olive Technologies.
The study, which analyzed more than 300,000 data points across over 700 requests for proposal (RFPs) in the software industry, found that despite the widespread hype surrounding artificial intelligence (AI), it occupies a modest position in terms of actual requirements stipulated in RFPs.
However, it emerged as the swiftest-growing search term in the year 2024, indicating growing interest and potential future adoption.
“AI is the buzzword on everyone’s lips, but when you look at the actual requirements companies are putting in their RFPs, it’s not ranking as high as you might expect,” Olive founder and CEO Chris Heard said. “So, why the disconnect?”
He explained there are a few factors at play: Firstly, while AI has huge potential, many companies are still trying to figure out how to integrate it effectively into their operations and define specific requirements for AI solutions.
“It’s not just a matter of plugging in a new tool—it requires a strategic approach and often significant changes to processes and infrastructure,” he said.
He explained now there are fewer questions around high-level “AI” and more focus on aspects like data storage, where buyers have been able to build up significant knowledge to ask the right questions.
“There’s also still a level of uncertainty around AI,” Heard added. “Companies want to be sure that the solutions they invest in are reliable, secure and aligned with their specific needs.”
Until vendors can effectively demonstrate the tangible benefits and ROI of their AI offerings, some businesses may hesitate to prioritize it in their RFPs.
He noted “cloud” also is not often included in RFPs, as it may be assumed by many buyers that software can be delivered in the cloud and that AI functionality is already doing some of the work.
“This doesn’t mean that vendors should dismiss AI altogether,” Heard said. “On the contrary, this trend highlights the need for vendors to be more proactive and educational in their approach.”
Instead of just touting AI as a buzzy feature, they need to clearly articulate how it can solve real business problems and deliver measurable results.
Heard said vendors should focus on developing case studies, proofs of concepts and detailed roadmaps showcasing the practical applications and benefits of their AI solutions.
“They need to be ready to answer tough questions and provide evidence of successful implementations,” he noted.
Meanwhile, enterprise resource planning (ERP), human capital management (HCM), customer relationship management (CRM), learning management systems (LMS), and Point of Sale (POS) stood out as the most scrutinized categories among Olive customers.
The top themes in requirements were data and reporting, indicative of companies’ heightened cognizance regarding the intrinsic value of their data assets and their fervent desire for lucid, actionable insights from technology vendors.
The constant appearance of terms such as “data,” “reporting,” “integration” and “mobile” underscored the burgeoning demand for data-centric decision-making paradigms, comprehensive reporting functionalities, seamless interconnectivity and mobile accessibility within IT solutions.
Integration and configuration also feature prominently among the required capabilities, an indicator of the challenges enterprises encounter when integrating disparate systems and their consequent insistence on turnkey integrations from vendors.
“Navigating the complex world of IT sourcing is no easy feat, especially when you’re bombarded with biased information and incomplete data at every turn,” Heard said. “It’s like trying to find your way through a maze blindfolded.”
From his perspective, the key to successfully navigating the complex IT sourcing landscape is to take a proactive, inquisitive and data-driven approach.
“While it takes work, the power of unbiased decisions built on comprehensive data is unmatched,” he said.
He recommended diversifying information sources and verifying claims through a mix of independent analyses, user feedback and direct vendor interactions.
“Understand the methodology behind the analyses you’re reading,” he said. “Knowing how data is collected and conclusions are drawn can help you spot potential biases.”
He also advised engaging with peers in industry forums and discussions to gain real-world insights.
“Don’t just rely on reports — use them as a starting point, then dig deeper with your own thorough evaluation,” Heard said.
Finally, IT buyers should regularly update their benchmarks and criteria for assessing solutions.
“The IT landscape is always evolving, and so should your approach to navigating it,” he said.
