Software // Enterprise Applications
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1/16/2004
05:49 PM
Bob Evans
Bob Evans
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Business Technology: Customers Long For What Matters Most

The good news: In a survey of customers, enterprise-apps vendors get good marks for cutting-edge technology and technology vision. The bad news: That's not what customers value most in their big applications partners; rather, they value quick ROI, superb service, integrity, and simplicity. And they give the vendors lousy marks in those categories, Bob Evans says.

Last year, the major enterprise-applications companies each took significant steps to tune their businesses more tightly to their customers' expectations. Oracle hired Wall Street superstar Chuck Phillips to fix the company's reputation for treating its customers with a mix of disdain and arrogance, and for the first time company executives admitted publicly that Oracle needed to totally revamp its approach to and relationships with customers. SAP rolled out an enhanced strategy of offering deep vertical-market expertise, recognizing that customers were demanding more than just technically brilliant code. With its NetWeaver line, SAP also seemed to acknowledge that customers wanted less complexity and more interoperability. At PeopleSoft, customers showed significant loyalty to the company in the face of extremely aggressive recruiting efforts by Oracle to convince those customers that they might as well come aboard early since the proposed acquisition ultimately would happen. By contesting the Oracle acquisition attempt not only in its boardroom but also in the marketplace of customers, PeopleSoft staved off the mass defections its suitor hoped to spark.

This seems like progress. But a study released last week on customer attitudes toward vendors of enterprise-application packages points to an enormous gap between what customers say they want most and what companies are delivering. The Yankee Group report says business-technology managers put the greatest value on high integrity, fast return on investment, inexpensive operation, easy implementation, and excellent service. But those ideals exist mostly in theory, the customers said, as software companies remain fixated on delivering cutting-edge technology rather than what the customers really want. For more details, go to informationweek.com/971/erp.htm.

OTHER VOICES
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-- USA Today, Jan. 14


As a result, few of those customers were willing to recommend any of the leading enterprise-applications vendors: Only 32% said they'd recommend Oracle, while PeopleSoft came in at 29% and SAP at 26%. But, hey, it could be worse--the company that acquired Baan last year, SSA Global Technologies, came in at 1%.

Now, we all know what Benjamin Disraeli said: "There are three kinds of lies: lies, damned lies, and statistics." And I'm sure Oracle, PeopleSoft, and SAP can point to some of their own studies showing much-higher levels of customer satisfaction. But the fundamental truth is impossible to ignore: At a time when customers are being more judicious with their spending and more rigorous in their scrutiny of technology partners, these large software companies are still focusing too much on the software--the code--and not enough on the experience and results their customers will achieve via that code.

And finally, here's a quirk from the Yankee Group study that, depending on your perspective, either clarifies or further muddles the picture: The technology vendor that recorded the highest number of above-average scores on the list of attributes that a perfect ERP vendor would have is IBM. The only catch, of course, is that IBM doesn't sell ERP software. So does this mean the respondents were uninformed about the whole subject? Or does it mean something else--such as, they'd like these big applications companies to treat them the way IBM treats them?

One way to think about this is to take another look at a recent cover story ("Vertical Vision," Dec. 8, 2003) on IBM's new philosophy for software and service: "IBM is shifting to an industry-specific strategy to reflect how businesses want to buy software." The software itself, after all, is purely a means to an end, whereas the end is business value, customer value, and greater success.

Bob Evans
Editor in Chief
bevans@cmp.com


To discuss this column with other readers, please visit Bob Evans's forum on the Listening Post.

To find out more about Bob Evans, please visit his page on the Listening Post.

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