Transcript MIS Organisational Buyer Behaviour

MIS Organisational Buyer Behaviour
Godfrey Supka – Dijon 9 September 2016
MIS Organisational Buyer Behaviour
•
•
•
•
•
•
•
•
What are we measuring?
Why is it important?
Start-point – literature review
Methodology
Questions
Results
Implications
Recommendations
The Question – Why do MFIs buy a new MIS?
Not
• Why do they think of buying a new MIS?
• Why do they need a new MIS?
• Why do they select a particular MIS?
But
In what circumstances do they actually buy a new MIS?
As opposed to…
• Staying with what they have
• Cancelling the selection process
• Looking forever
Why is it important?
• MIS vendors
• Identify potential clients, not time-wasters
• MFIs
• Understand the likely progress and dynamics of the replacement process
• Investors, regulators and other stakeholders
• Anticipate what MFIs are likely to do
• All
• Don’t waste time, effort and money
Start Point – Literary Review
• Davis, F. D. (1989), "Perceived usefulness, perceived ease of use, and user acceptance of information
technology", MIS Quarterly 13(3): 319–340
• Dimaggio, P.J. and Powell, W.W. (1983) The iron cage revisited - institutional isomorphism and
collective rationality in organizational fields, "American Sociological Review", Vol. 48, No. 2, pp 147160.
• Kotler, P. & Armstrong G. (2010) Principles of marketing. 13th edition. Pearson Prentice Hall, New
Jersey
• Rogers, E.M. (1995) Diffusion of innovations, Fourth Edition ed., New York, Free Press.
• Scott, W.R. and Christensen, S. (1995) The institutional construction of organizations: International and
longitudinal studies Thousand Oaks, CA, Sage Publications.
• Tornatzky, L. and Fleischer, M. (1990) The process of technology innovation, Lexington, MA, Lexington
Books.
• Webster, F., & Wind, Y. (1972). A General Model for Understanding Organisational Buying Behaviour.
The Journal of Marketing
Start Point – Literary Review
• Davis, F. D. (1989), "Perceived usefulness, perceived ease of use, and user acceptance of information
technology", MIS Quarterly 13(3): 319–340
• Dimaggio, P.J. and Powell, W.W. (1983) The iron cage revisited - institutional isomorphism and
collective rationality in organizational fields, "American Sociological Review", Vol. 48, No. 2, pp 147160.
• Kotler, P. & Armstrong G. (2010) Principles of marketing. 13th edition. Pearson Prentice Hall, New
Jersey
• Rogers, E.M. (1995) Diffusion of innovations, Fourth Edition ed., New York, Free Press.
• Scott, W.R. and Christensen, S. (1995) The institutional construction of organizations: International and
longitudinal studies Thousand Oaks, CA, Sage Publications.
• Tornatzky, L. and Fleischer, M. (1990) The process of technology innovation, Lexington, MA, Lexington
Books.
• Webster, F., & Wind, Y. (1972). A General Model for Understanding Organisational Buying Behaviour.
The Journal of Marketing
Influences
Kotler, P. & Armstrong G. (2010)
Influences

Environmental: The wider business environment and trends

Organisational: The structure, scale, culture, mission,
priorities and resources of the buying organisation

Interpersonal: The dynamics of the relationships in the
decision making unit

Individual: The personality, preconceptions, status and
culture of each individual in the unit
Kotler, P. & Armstrong G. (2010)
Process
Kotler, P. & Armstrong G. (2010)
Process
Webster and Wind (1972) - “Decision Making Unit” (DMU) –
comprising users, buyers, influencers, deciders and gatekeepers
Kotler and Armstrong (2010) – focus on interpersonal issues


within the buying centre,
between the centre and the vendor.
Kotler, P. & Armstrong G. (2010)
Influences – Environmental - Competition
BancoSol Interest Rate Reductions 1998-2005 (Rhyne & Otero, 2006)
BancoSol Product Diversifications 1997-2006 (Rhyne & Otero, 2006)
Influences – Environmental - Competition
BancoSol Interest Rate Reductions 1998-2005 (Rhyne & Otero, 2006)
BancoSol Product Diversifications 1997-2006 (Rhyne & Otero, 2006)
In some countries that are either very mature markets (Bangladesh,
most of Latin America) or very stable (Uganda) or both, poor borrowers
now have competing potential lenders, where 20 years ago there were
none. This has had the effect of driving down interest rates, putting
pressure on margins and increasing the range and choice of services.
Influences – Environmental – Commercial Entry
Influences – Environmental – Commercial Entry
Such consolidation in microfinance would increase the number
of MFIs with the critical mass for significant MIS investment, and
provide them with a need either to combine or replace existing
systems. Some form of MIS project would be unavoidable.
Influences – Environmental - Technology
Influences – Environmental - Technology
“Breakthroughs in the use of technology require that microfinance
institutions have already incorporated technology thoroughly into
their operations... that is, primarily on the back end... (to) produce
timely and transparent financial reports, and report on their
operations as otherwise needed. These attributes will be sine qua
non for future microfinance institutions.” (Rhyne & Otero, 2006).
Most discussion focussed on front-end technologies such
as mobile or branchless banking, but robust MIS is the
essential foundation for innovation in delivery channels.
Influences – Environmental – Policy Framework
Not only does deposit taking require an increase in
function beyond what may have been available in a
lending system, but the regulators may require more
robust MIS systems as a condition of granting a licence.
Influences – Organisational
Organisation type
NGOs, credit unions and cooperatives
•
Semi-formal
•
Owned by members
•
Governed by trustees
•
Supported by donors, government, etc
Banks - State, agricultural development, rural, savings,
postal, commercial, non-bank financial institutions.
•
Formal
•
State- or privately-owned
•
Shareholders for-profit, social mission or both
(Helms, 2007)
Influences – Organisational
Organisation type
Culture & Customs
NGOs, credit unions and cooperatives
•
Semi-formal
•
Owned by members
•
Governed by trustees
•
Supported by donors, government, etc
•
•
•
Collaborative
Consensual
Non-profit
Banks - State, agricultural development, rural, savings,
postal, commercial, non-bank financial institutions.
•
Formal
•
State- or privately-owned
•
Shareholders for-profit, social mission or both
•
•
•
Professional
Hierarchical, authoritarian
Commercial
(Helms, 2007)
Methodology
Survey of practitioners – Vendors, MFIs, Experts
Interpretive and inductive
•
Investigate issues in general
•
Drill down to specific issues
Responses coded and grouped
No attempt to weight responses
Methodology - Survey
Confidential interviews with 20 people
•
MFI management (9),
•
Vendor sales staff (8, representing 5 vendors)
•
MIS industry experts (3).
•
20 different MIS purchase events over a five year period
Interviews
•
Telephone/Skype,
•
1-2 hours, average 75 minutes,
•
Semi-structured, open-ended questions
Methodology - Survey
Confidential interviews with 20 people
•
MFI management (9),
•
Vendor sales staff (8, representing 5 vendors)
•
MIS industry experts (3).
•
20 different MIS purchase events over a five year period
Interviews
•
Telephone/Skype,
•
1-2 hours, average 75 minutes,
•
Semi-structured, open-ended questions
In some cases a respondent had information or opinions on more than one MIS
purchase case studied, in which case responses were aggregated by response type.
Methodology - Questions
Example questions:
1. What were the key environmental trends that determined a need to change MIS system?
2. What were the key business needs that MIS investment was designed to address?
3. What effect did technological changes such as e-channels and improved internet have on decisions?
4. How did the organisational aspects of the MFI affect its purchasing process?
5. How did changes in resource availability affect purchase events?
6. How influential were external stakeholders in decisions, and in what way?
Results
The survey revealed purchasing drivers that could be grouped into three groups
•
External Drivers
•
Internal Drivers
•
Event Drivers
Each containing five drivers.
Results – External Drivers
Cases
7
6
5
4
3
2
1
0
Results – External Drivers
•
•
•
•
•
Competition (sudden, aggressive)
Funding (new money, new funder)
Economy (growth – take advantage of opportunity)
Regulation (significant change – permission, reporting)
Technology (new opportunity, available connection)
Cases
7
6
5
4
3
2
1
0
Results – External Drivers
Increased competition,
Sometimes driven by policy changes
“South Africa is mandating microfinance to commercial banks”
“Governments in Latin America are pressuring access to credit”
“Major banks are moving into microfinance, on a for-profit basis”
“Big banks see a captive market for mobilising deposits”
Cases
7
6
5
4
3
2
1
0
Or by new market entry
“There is a blurring of lines between banks, phone companies and merchants”
“We foresee Telcos and supermarkets acquiring banking licences.”
Need to gain scale, for cost saving or capital requirements.
“We anticipate consolidation based on economies of scale, e.g. MFIs with 200,000+ clients, with others
being driven out of business”
Results – External Drivers
Influence of funders
“Major stakeholders, e.g. investors, lenders, networks, may want to
influence technology decisions. In general the message is ‘you need to
get yourself a good system’ rather than being specific.”
Networks are more specific
“With those who are wholly-owned or majority-owned, especially if they
have a board seat, we can ask a potential partner MFI ‘Are you running
on my standard system?’”.
Cases
7
6
5
4
3
2
1
0
Results – Internal Drivers
Cases
9
8
7
6
5
4
3
2
1
0
Results – Internal Drivers
•
•
•
•
•
Growth (consensus at all levels for large scale-up)
Deposits (new features, robustness for deposit taking)
Standardisation (generally across large networks)
Channels (desire to increase outreach, connect to available channels)
Centralisation (mainly to reduce risk – deposits, timely reporting)
Cases
9
8
7
6
5
4
3
2
1
0
Results – Internal Drivers
Growth is No1, but can be false factor – why grow?
“It is a chicken and egg problem, how to justify investment without
scale, how to cope with scale without investment.”
Can be in response to other driver, e.g. new resources
Economies of scale
“Drive up scale through consolidation, with a faster ramp up time”.
Electronic channels
“GSM-enabled point of sale (POS) handheld devices and biometrics for
client acquisition, loan origination, payments, funds transfer to
increase outreach and offer new services.”
“There is a need to bring to the developing world the cashless
technologies and methods of the developed world. It is dangerous for
banks to have cash – for both employees and clients”
Cases
9
8
7
6
5
4
3
2
1
0
Results – Internal Drivers
Growth is No1, but can be false factor – why grow?
“It is a chicken and egg problem, how to justify investment without
scale, how to cope with scale without investment.”
Can be in response to other driver, e.g. new resources
Economies of scale
“Drive up scale through consolidation, with a faster ramp up time”.
Electronic channels
“GSM-enabled point of sale (POS) handheld devices and biometrics for
client acquisition, loan origination, payments, funds transfer to
increase outreach and offer new services.”
“There is a need to bring to the developing world the cashless
technologies and methods of the developed world. It is dangerous for
banks to have cash – for both employees and clients”
Cases
9
8
7
6
5
4
3
2
1
0
“Channels don’t work without
strong MIS. Often MFIs don’t
have a good core system at the
back end.”
Results - Events
Cases
8
7
6
5
4
3
2
1
0
Results - Events
17 out 20 had a compelling event (some had more than one)
Closely aligned with drivers
External
Close competitor purchased a major MIS
Internal
Availability of bank licence to gain access to deposits
Cases
8
7
6
5
4
3
2
1
0
Conclusions
Summary of likely drivers to MIS purchase
•
External
• Competition (sudden, aggressive)
• Funding (new money, new funder)
• Economy (growth – take advantage of opportunity)
• Regulation (significant change – permission, reporting)
• Technology (new opportunity, available connection)
• Internal
• Growth (consensus at all levels for large scale-up)
• Deposits (new features, robustness for deposit taking)
• Standardisation (generally across large networks)
• Channels (desire to increase outreach, connect to available channels)
• Centralisation (mainly to reduce risk – deposits, timely reporting)
Conclusions
Summary of likely drivers to MIS purchase
•
External
•
Events
• Competition (sudden, aggressive)
• Arrival of new resources (money, MIS)
• Funding (new money, new funder)
• Grant of banking licence
• Economy (growth – take advantage of opportunity)
• Arrival of new management
• Regulation (significant change – permission, reporting)
• Major system failure
• Technology (new opportunity, available connection)
• New entity (“green field”)
• Internal
• Growth (consensus at all levels for large scale-up)
• Deposits (new features, robustness for deposit taking)
• Standardisation (generally across large networks)
• Channels (desire to increase outreach, connect to
available channels)
• Centralisation (mainly to reduce risk – deposits, timely
reporting)
Implications
•
•
•
•
•
Evidence of likely drivers to MIS purchase – “compelling reason”
Clear importance of “compelling event”
Some clarity of methods of qualification for vendors
Framework for evaluation of purchase process for MFIs, stakeholders
Add drivers and events to business case
Recommendations
•
•
•
•
•
•
Feed drivers and events into questionnaire
Larger survey group
Wider range of MIS vendors
Objective evidence of existence of drivers, and their influence.
Include failed/cancelled purchase projects – test negative correlation
Test drivers against level of investment $
Thank you – Questions?
Godfrey Supka – Dijon 9 September 2016