A DQ-IDC INDIA REPORT: CSA 2003

Read any marketing book–all

strategies culminate in a simple philosophy–are your customers satisfied? And

the IT industry is no different. And the CIO is not a different animal either.

To find out what rules the mind of the CIO and what are the key determinants for

his buying decision, this Dataquest-IDC India Survey contacted 307 CIOs and

conducted the Customer Satisfaction Audit 2003. While most top brands have fared

well, some have fallen by the wayside.

Desktops



IBM

customers are more than satisfied with their vendor, and this propels IBM to the

top. IBM and Compaq are the only vendors scoring above the industry averages in

all parameters. Given that the "product" is the most important

attribute for CIO satisfaction, it is important to note that barring HCL

Infosystems (HCLI) and assemblers, other vendors score high on this attribute.

When you remember that HCL Infosystems is the #1 vendor in the Indian market,

there can be two possible reasons for its low performance. One, that CIOs are

setting very high benchmarks for all attributes. Two, that CIOs are not

satisfied with the ‘HCL’ brand and the product. Analyze the Product category

a bit further and HCL shows a decline in the most important factor in this

category–Reliability. Even HP falls below the industry average for this

sub-category. Another key area where even HP and Wipro–along with HCL–need

to focus is delivery. Even assemblers meet the CIOs’ expectations and are

above the industry average. Also, in terms of the most important sub-factor,

Delivery, assemblers are above the industry average in all five sub-factors.

Moreover, since all products are more or less standardized, assemblers tend to

focus on delivery. All vendors are broadly focussed and have got ratings

according to their importance attributes. The exceptions in the list are

assemblers and IBM–where installation has taken a backseat, making way for

sales and marketing.

The

‘product’ is the most important attribute of satisfaction in the desktop

segment. Within products, CIOs attribute the ‘reliability’ of the product as

the most important factor for satisfaction. Again, one must not overlook the

fact that the difference between the first and the last attribute is not very

significant. Dataquest stresses that while all the five factors are important in

the final decision-making for buying desktops, the perception of a CIO–that

‘product’ tops his list–led to the judging of this attribute as an

important satisfaction parameter. Delivery closely follows product as the next

most important factor. Also, due to the high degree of standardization in

desktops, sales and marketing did not figure very high. It is the same in the

case of after-sales service. As medium and large corporations have their own IT

teams or outsource the same–and given the degree of support infrastructure

built by vendors–ASS has become a non-issue today.

Portables



How
did the key brands fare?




IBM is on top here too. Following the gains in the desktop segment, IBM tops

the satisfaction list in the notebook segment as well. Toshiba and Compaq

follow. Of the five categories, IBM leads in four, while Toshiba–with support

infrastructure from HCLI–leads in ASS. Also, CIOs perceive that all vendors

are broadly focussing on the top three attributes in order of importance. Thanks

to highly-satisfied IBM customers–those who have given high satisfaction

scores to IBM–Compaq takes a beating. Toshiba has just about managed to score

above the industry average. In the top two importance parameters–viz product

and installation–IBM seems to have set the benchmark, with customers of the

other two companies not giving them scores to match. Again, it needs to be

highlighted that the differences are only marginal, but that’s what surveys

are all about.

What

CIOs want from vendors of portables



The findings are in line with the desktops segment. Product, delivery and

installation are the top factors driving CIO satisfaction. Given the solid

support programs initiated by all vendors for notebook repairs–within 48-72

hours–after-sales services has ceased to be a major concern for CIOs

Servers

How

did the key brands fare?



Compaq is setting the benchmarks in this segment. Given its #1 position in

the overall server market, that’s not hard to understand. Satisfaction for

Compaq is way ahead. Look at the top attribute, Product. Compaq, with a score of

81, is way ahead of Unix segment leader Sun Microsystems, which scores 72. In

fact, Sun–along with Big Blue–is well below the industry average on all five

product sub-factors. And this is not an isolated case for the Product attribute

alone. If Sun and IBM want to counter the Compaq threat, they need to focus on

improving their satisfaction levels, as against Compaq and HP (now one company).

Also, it is important to note that all vendors are focussing on attributes based

on the importance that CIOs give them. Maybe it’s time for IBM and Sun to get

going.

Like

the other two segments, Product, Delivery and Installation top the importance

list for CIOs. One assumes that given the high degree of obsolescence in the

trade and the high-end nature of the product, ASS would be an important factor,

especially with respect to factors like availability of spare parts, warranty,

replacement warranty, competence of technical personnel etc. However, CIOs seem

to be far more concerned with the three attributes in question–Product,

Installation and Delivery.

Enterprise Apps



How
did the key brands fare?




It’s interesting to note that market leader SAP is just marginally behind

BAAN in satisfaction terms. Given the higher marketshare and penetration of SAP,

IDC India had taken this key factor into account and included weight according

to the marketshare (see research methodology). So how did BAAN pull it off? One,

it has been a neck-to-neck race for the top place, with SAP leading in one and

BAAN in the other four attributes. BAAN scored higher in Overall Product and

Compatibility to edge ahead of SAP, despite the higher weightage given to SAP

for higher marketshare. And that tipped the ratings in favor of BAAN. A few sub

factors, including compatibility with the existing hardware platform, initiative

of the company to constantly upgrade its product and its quality, availability

of adequate documentation for usage (user manuals literature, etc) and

user-friendliness of the product helped BAAN move ahead. However, a word of

caution for BAAN and Ramco. While overall product and functionality top the

importance attributes, BAAN needs to relook at the same, as its customers feel

that the company is focusing on products and compatibility. Also, Ramco’s

focus seems to be away from the CIOs’ needs–the focus seems to be more on

installation, support and pre-sales activities.

What

CIOs want from vendors of enterprise applications



Product reigns supreme, even in enterprise applications. Hand-in-hand is the

functionality built into the product. In terms of functionality, the most

important factors are appropriateness in business requirement and provision of

complete solutions for all relevant processes. Given the nature of enterprise

applications, off-the-shelf products do not command much respect among CIOs–and

customization is the name of the game. The level of customization helps

determine the level of CIO satisfaction.

IT Services

TCS–the

software giant–is the clear choice for CIOs when it comes to integration and

outsourcing requirements. It leads the satisfaction ratings in all attributes.

Can competition move to the same level? Yes, but it’s going to be a long, hard

climb. All things considered, all vendors–including TCS–need to refocus

their strategies according to the CIOs’ importance list. For one, while CIOs

indicate quality of service as the pinnacle of their importance list, no company

except IBM is focussing on this attribute. Even for TCS, scores on this

parameter are rather low. Also, while TCS is focussing on routine or preventive

maintenance/checks by engineers, this parameter is low on the CIOs’ priority

list.

Quality

of service, contract sanctity, going an extra mile are the drivers of the

services function. Vendors have a help desk to sort out CIO concerns, but that

comes last on the priority list of CIOs. What CIOs are looking at is how the

vendors look at the contract, adhere to it, their response and complaint

resolution time-cycles, etc...

Yograj Varma



Research and analysis by Tirthankar Sen, senior market analyst (end-user

research), IDC India Ltd

Research Methodology>>>>>>>>>>>

IDC

India conducted a survey among 307 enterprise CIOs, with the objectives

being to:

• Develop a brand score of customer satisfaction for different product and
  
  service categories; and
• Identify functional and service attributes that drive customer
  
  satisfaction.

The survey was conducted

in the enterprise space, covering large enterprises across the verticals.

The survey was spread across six cities–Delhi, Mumbai, Bangalore,

Chennai, Hyderabad and Kolkata. In terms of segments, it covered hardware,

software and services. In the hardware category, it was desktops,

portables and servers; integration services and outsourcing services made

up the software category; and in enterprise management applications, ERP,

CRM and SCM were the apps considered.

In each category, a

sample size for each brand was fixed. Also, IDC India weighted the results

with brand-share to remove anomalies. The sample was made representative

to the distribution of the universe–this

was necessary to arrive at overall satisfaction scores.

Hence, for every

category, parameters were developed separately, using the understanding of

the market and the customers therein. However, broad parameters were kept

tangible and actionable. At the same time, IDC India asked respondents in

isolation about the importance of the attributes, without linking these to

the brand–so that important parameters, as prioritized by CIOs, could be

arrived at. Also, CIOs were asked to give a rating on certain sets of

parameters, depending on usage, to get a clearer picture.

By this methodology, IDC

India could get a picture of importance of parameters and overall

satisfaction. To arrive at overall satisfaction scores, IDC India measured

satisfaction against each of these "importance" parameters and

arrived at a weighted score of satisfaction, on a maximum possible total

of 100, which makes all the parameters and brands comparable within their

scope.