CSA 2008: Satisfied, but not Delighted

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DQI Bureau
New Update

A product or service offering is the key satisfaction derivative for the CIO.
Vendors will need to fulfill at least that basic satisfaction. However, the key
differential in satisfaction or that extra mile satisfaction is going to come
from the extra mile post sales experience in terms of services and support
that the vendors are able to provide to customers.

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This is reflected in the findings of the DQIDC CSA2008 survey, where, in at
least four of the eight segments being surveyed, post sales service/post
contract stage experience emerged as the second most important satisfaction
parameter for the enterprise user. This is also the sign of growing market
maturity as it graduates beyond the initial phase of deployment, implementation,
and adoption. It is gradually going to become critical for the vendors to
re-align their customer satisfaction strategies with this imperative.

Vendor Performance

Having a higher market share does not necessarily mean higher customer
satisfaction. There are a few exceptions like Cisco in networking products, HP
in laser printers and MFDs, and HP in notebooks. However, the instances proving
the disjoint are far too many this year. Take for instance Microsoft Business
Solutions and SAP in the case of enterprise applications; Sun in enterprise
storage; CMS and HP in IT Services; 3Com in networking products; and Sun again
in servers.

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Microsoft edged past SAP to become the enterprise applications vendor that
CIOs are most satisfied with. While popular perception, going by market share,
would have sided with SAP, CIOs obviously feel otherwise. Similarly, in case of
IT services, while CMS went up 3 ranks, the global MNC, HP dropped an equal
number to end up at #6.

The big IT services vendors like Wipro, TCS/CMC, IBM, and HP fail to make it
to the top three. 3Com pushed up two ranks in the networking segment, ending a
mere 0.4 points below the market share leader Cisco. Sun had a field day in both
servers and storage, where it is a joint winner with EMC.


Methodology: DQ-IDC CSA 2008
The sixth
Dataquest-IDC survey on Enterprises Customer Satisfaction with IT products
and suppliers is compiled on the basis of methodology jointly decided by IDC
India and Dataquest. The IDC team was led by Shailendra Gupta, and assisted
by Arpan Gupta.

IDC India conducted the
survey among 326 CIOs of 1,000 large enterprises (from ET 500, BW 500, or BS
1000 lists) this year, with the same objectives as that of DQ-IDC CSA 07,
which were: to develop brand scores of customer satisfaction for different
product and service categories, and to identify functional and service
attributes that drive customer satisfaction.

The survey covered large enterprises across
various verticals like Manufacturing, BFSI, IT/ITeS, Telecom and Other
Services and the Government. The survey was spread across ten citiesDelhi,
Mumbai, Bangalore, Chennai, Kolkatta, Hyderabad, Pune, Ahmedabad, Coimbatore
and Chandigarh. The survey covered Desktops, Notebooks, Servers, Enterprise
Applications (SCM, CRM, ERP), IT Services (integrated and outsourced
services), Networking Products, Laser Printers & MFDs, and Enterprise
Hardware Storage (SAN, NAS). In each category, a minimum sample size for
each brand was identified using the understanding of the market. CIOs were
asked to rate the level of satisfaction on each of the parameters and
sub-parameters on a five-point scale, depending on the usage of the product
or service. Hence, each CIO could give multiple responses. That explains the
different bases of responses in each individual category.

IDC India derived the importance of each of
the parameters from the satisfaction scores, which were used as weights for
each of the sub-parameters. To arrive at overall satisfaction scores of
different products and services, IDC India measured satisfaction against
each of these importance parameters and arrived at weighted scores of
satisfaction, on a maximum possible total of 100, which makes all the
parameters and brands comparable within their scope.

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A plausible explanation for this can be the theory that greater the market
standing of the vendor greater the expectations, setting a higher bar for
satisfaction. And, by the same logic, the next in line vendors are able to
exceed expectations because the bar is set low for them.

There is also a possibility of erosion of customer satisfaction as companies
grow bigger and expand their footprint because not all can cope with pressure.
Simultaneous growth in marketing and customer focused initiatives can arrest
this erosion. Microsoft and Sun have aggressively expanded into the tier-2 and
tier-3 cities over the last year and a half, which gave them the proximity to
better cater to customers.

A common thread running through most of the segments is the sharp rise and
fall in vendor ranks. IT services emerges as one of the most dynamic and
volatile segments with some major upheavals. Apart from CMS gain and HPs loss
of 3 ranks each, other cases in point are Sify moving up 3 ranks and HCL
Infosystems and Wipro gaining and losing, respectively, 2 ranks each.

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While 3Com and Microsoft Business Solutions gained 2 ranks each in the
networking and enterprise applications segments, Sun made hay with a 3 rank gain
in the server segment. On the other hand, both notebooks and desktops were
equally volatile with Dell gaining 4 ranks (from 6 to 2) in the former, and
Lenovo making the same jump to be the topmost vendor in desktops. The big upset
in desktops was Wipro, which lost 4 ranks to become the second lowest ranked on
customer satisfaction.

Performance Barometer

While enterprise applications was the front runner on the overall
satisfaction score, IT services got the lowest score. Incidentally, the rise in
satisfaction is the highest with IT services (at 1.60% growth in satisfaction)
and enterprise applications vendors (at 1.79% growth), which were the worst hit
in last years dip.

The improvement in satisfaction levels notwithstanding, there remain common
concerns for CIOs when it comes to satisfaction with vendors. These include
training/demonstration/hand holding, vendor expertise, availability of spare
parts, clarity of pricing contracts, domain knowledge, interaction with the
service team, total cost of ownership, credit facility received, routine checks,
responsiveness and availability of service personnel, ease/convenience of
installation, and adherence to SLAs.

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Shipra Malhotra

shipram@cybermedia.co.in

Desktops

With the desktop market becoming highly commoditized, there is hardly any
differentiation in terms of features and functionalities offered by various
vendors. Ensuring customer satisfaction in such a highly commoditized market,
thus, becomes an even more challenging task. This is reflected in the low degree
of variance within the satisfaction scores of different vendors.

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With the product being commoditized, the key difference in satisfaction comes
from the services part. Considering this, its a matter of concern that vendors
have done poorly on the post-sales service parameter. With a satisfaction score
of 81.3, it is the lowest among all the parameters. The saving grace, though,
has been the comparative growth over last years score80.7 points.

The survey threw light on some concerns that CIOs have from their desktop
vendorsdemonstration and training, expertise of vendor, availability of spare
parts, clarity of pricing contract, etc.

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The overall customer satisfaction score in the desktop market has shown a
very marginal improvement (from 82.7 points last year to the current 82.9
pointsa 0.24% growth) upon last years performance. While the satisfaction
growth trend can be termed as almost staid, the interesting part here is the
vendor dynamics.

Lenovo witnessed a sharp rise
in satisfaction with customers expressing satisfaction on parameters like
pre-sales and marketing, price and commercial, and delivery and
installation. On the other hand, CIOs issues with factors like Overall
Product Reliability (Product Features), Value for Money (Price and
Commercial), and Interaction with the service team (Post-Sales Service)
proved to be Wipros Achilles heel, leading to its downfall

Lenovo regains the #1 position that the IBM-Lenovo combine held in the
CSA-2006 survey. More importantly, Lenovo and Zenith are the only vendors to
have improved upon their last years satisfaction scores.

Over the last one-and-a-half years, Lenovo has expanded its footprint in
India. The company worked on the visibility part. Around two years ago, IBM
overshadowed the Lenovo brand, whereas people have now started identifying with
Lenovo as well. This is reflected in the satisfaction improvement on the
pre-sales and marketing parameter, from 82.9 points last year to the current
84.7. Considering it is also the strongest in terms of product as well as
post-sales service, Lenovo seems to have everything going for it in the right
places. Even though CIOs seem to be happiest with Lenovo when it comes to
product reliability, product functionality, domain knowledge and understanding,
value for money and responsiveness, the company needs to work on devising better
clarity in its pricing contracts, and needs to up the ante on demonstration and
training. Overall, on pricing and delivery and installation front, it is HP that
takes the cake.

On the five key satisfaction parameters, CIOs are most
satisfied with their desktop vendors in terms of their product offerings.
But their verdict reflects that vendors need to work upon improving their
post-sales service to match up to the satisfaction levels that the product
elicits. Post-sales parameter has the lowest satisfaction score
despite being the second most important derivative of satisfaction

On the other hand, Wipros lack of focus on its PC business probably explains
its disappointing fall of four places. As an SI, it has mostly been pushing its
desktop where there is an opportunity in its SI deals. This apart, it has been
picking up some government deals. The company hasnt invested much in terms of
product evolution, nor has it been competitive on the pricing front. The
cumulative effect is the drop in satisfaction levels of its customers.

Customer
satisfaction in the desktop market has gone beyond standard requirements

Sudhir Puthran, director,
Service & Support, Lenovo India

What has been the
companys strategy for ensuring customer satisfaction?


Last year, the focus was primarily on how we move to the next level, from
satisfying the customers to delighting them and how we get that kind of
response from the customer. One of the answers was reaching customer on
time. We worked on increasing our coverage, which was a big issue last year.


For commercial desktops on
the enterprise front, we expanded from 88 cities to around 120. Then we
looked at the touch points. The people who touch customers are those in call
centers and engineers who go to the field. We want them to carry the same
conviction. For this, we started a training program for imparting soft
skills, as its a mind thing.


What initiatives have you
undertaken in the area of customer support?


Last year, we set up our customer care operations, which allow a single
touch point for customers and partners to elevate any possible issue they
may have. There is one owner, who will be the contact point and that owner
will internally chase the right people and push them. When the business as
usual fails or the normal process fails, it can be brought to the customer
care operations without the customer or the partner bothering about who to
contact and how.

What challenges do you
face in satisfying ever-demanding customers?


Customer satisfaction in the desktop market has gone beyond the product and
the standard requirements. The key challenge now is how to make our people
sensitive to the non-standard requirements and issues of the customers.

Vendors know what to focus most onproduct
and post-sales serviceto make CIOs satisfied, considering these two have
come up as the top two parameters of satisfaction. Lenovo has scored the
highest on all the three product attributes, helping it ensure the top
position in overall satisfaction. Surprisingly, it is the assembled market,
and not the branded players, that has been able to satisfy CIOs most when it
comes to expertise in resolving problems

Notebooks

Notebooks, today, form not just the entry point, but also the fulcrum of
enterprise mobility. The satisfaction levels in this particular segment,
therefore, become critical in determining the entire enterprise mobility
experience. This, in effect, brings with it a set of more demanding and
discerning customers (CIOs). The end resultthe overall satisfaction levels of
the notebook users dropped, albeit a mere 0.12% (from 83.6 to 83.5).

While it may be a little far fetched to brandish such a marginal fall as a
rise in dissatisfaction levels, it would, nevertheless, do a lot of good to
probe a little further to understand the areas needing improvement.

This drop is primarily because of the performance in the three big areas of
product, pre-sales and marketing, and delivery and installation. Specifically,
CIOs referred to demonstration and training, interaction with service team,
total cost of ownership, vendors understanding and domain knowledge, and
availability of spare parts as their concerns with their notebook vendors. As
per the survey, the enterprise customers feel that vendors should also be
leveraging on aspects like functionality and convenience in operations.

As per the findings of CSA-2008, CIOs are now attaching greater importance to
pre-sales and marketing, price and commercial, and delivery and installation as
compared to last year.

Among the vendors, while HP moving from the second position to the number one
spot was no surprise, it was Dells ascendance of four ranks that is a drestic
change. Also, the companys model of direct dealing and selling can have
something to do with satisfaction.

Source: DQ-IDC CSA Survey 2008
Base: 326 CIOs (486 responses)


Satisfaction on vendor understanding/domain knowledge of your business
(Pre-sales and marketing), Clarity of Pricing, Contract & Credit Facility
Received (Price and Commercial), and Demonstration/Training (Delivery and
Installation) have been the major contributors for satisfaction improvement
for Dell this year

Customers are quite satisfied with Dells overall product functionality,
convenience in operations and clarity of pricing, wherein it has overtaken HP.

Both Lenovo and Toshiba witnessed a fall of two ranks each. Toshiba, in fact,
scored the lowest among all the vendors on the product and post-sales service
front. Riding on the IBM legacy, Lenovo had managed to make it to the top of
customer satisfaction in notebooks last year. However, over the year, the
company added its own Lenovo notebooks at the lower end to increase its market
base. Similarly, like IBM, Toshiba is also a premium brand. But, over the last
one year, in its bid to expand its market, Toshiba also got hit. Customers
couldnt find the brand value that they identified with the brand, leading to a
fall in satisfaction levels.

Except for the product parameter, in all the
remaining four parameters only two vendors are able to make it above the
industry average. Some of the major concerns that CIOs have from their
notebook vendors are proper demonstration and training, interaction with
service team, total cost of ownership, vendors understanding/domain
knowledge of their business, and availability of spare parts
A
business notebook user is a user having a very busy day, carrying data that
is critical to him


Anurag Arora, country manager,
Business Notebooks, Personal Systems Group, HP India

What
initiatives has the company undertaken to help improve its customer
satisfaction levels?

The initiatives taken by HP to improve customer satisfaction are to do with
ensuring that customers get a business notebook that they can rely on, is
easy to use and secure. For this we have worked on features that take into
account the usage patterns of users and suggest business notebook solutions
based on the usage.


What
about customer service/support initiatives?

We believe that a business notebook user is a user having a very busy
day, carrying data that is critical to him. Our services have been oriented
to satisfy this user. For that, a whole lot of notebook vendors give return
to bench warrant. In HP business notebooks, we have the provision to offer
on-site warranty. We are constantly innovating and have now started the Data
Recovery Services with our notebook. This is over and above the fact that we
are bundling the data backup and recovery manager software in our notebooks.
Our coverage spans thirty-three locations across the country and we plan to
triple the same within a few months, ensuring that the user virtually has no
downtime.

How are the satisfaction trends and
patterns of notebook customers changing?

The factors that are becoming crucial to keeping the customers in this
segment happy and satisfied are to do with the user of the notebook being
able to trust the notebook, have a great battery life, find it easy to use,
and is confident that the notebook is secure enough to avoid pilferage of
data. After all, a business notebook spends 12-14 hours in a day with the
user, and HP business notebooks are built to withstand that usage.

From your perspective as a vendor, which
challenges do you face in satisfying your customers?

Some of the challenges that we face are usage of the notebook in the
business environmentreliability, security, the spectrum of
needslightweight, workstation, standard, highly secure; and international
warranty.

While CIOs attach almost equal importance to
the top two satisfaction parameters (100 for product and 99 for pre sales
and marketing), there is greater disparity in their satisfaction levels on
both these derivates. Sony needs to put more energies and efforts into its
understanding of this market and domain knowledge of the business, wherein
it has scored well below the industry average and has also the lowest score
among all the attributes of product and pre-sales and marketing parameters

Servers

Due to increasing satisfaction for price and commercial followed by pre-sales
and marketing, the overall satisfaction of server users of enterprises has
increased by 0.36% (from 83.8 to 84.1 points) as compared to last year.

Customer satisfaction in the server market seems to be a highly competitive
play. The top three satisfaction scores (of Sun Microsystems, IBM, and HP) are
within 1.6 points of each other, with Sun and IBM standing almost neck-to-neck.
Among the top three, only Sun has managed to grow its satisfaction score and
that too with a margin of almost five points.

Looking at unit market share, Suns position would come as a surprise.
However, customer satisfaction is not a direct co-relation of market share.
While Sun might be more expensive than its competitors, it is the perceived
value that it brings for that cost in terms of robustness is what seems to have
worked in favor of the vendor.

The satisfaction on product
functionality, convenience in operation and responsiveness to the customer
requirements have catapulted Sun onto the number one position.
Interestingly, the company is the only one to have made some significant
improvement in satisfaction score over last year, while its competitors
didnt budge far from their last years scores

Another plausible reason can be the expansion of Sun into the x86 server
space in the last one-and-a-half year. Because it is a new product from Sun,
there are higher chances of a product refresh as compared to the vendors whore
already there in the x86 space. The footprint in the x86 space is also much
higher and that could have possibly helped expand its customer base itself. The
expansion in customer base means that there is a wider base of customers to
vouch for satisfaction versus customers who dont have any experience with the
product and, therefore, cant judge satisfaction levels.

With the operating system coming from the Sun stable, there is a possibility
of the OS talking to the server much better, thereby leading to a satisfying
experience with the product. This is reflected in the fact that the company has
got the highest score (90.3 points) on the product parameter, which is quite
ahead of the industry average of 86.3. CIOs are particularly happy with the
reliability, functionality of Suns servers and also the convenience in their
operations.

Last years top ranker IBM couldnt keep pace
with Sun on parameters like product, pre-sales and marketing, and post-sales
service, thereby conceding its position to the latter this year. While there
is little variance in the scores of Sun, IBM, and HP on all the five
parameters, HCL and Wipro have quite some catching up to do

Continuing the good run, Sun has improved upon its last years scores on all
the five derivates of satisfaction, while last years top ranker, IBM, has seen
a fall in scores on at least three countsproduct, pre-sales and marketing, and
post-sales service.

Wipro, on the other hand, despite scoring the lowest on all the five
parameters, has improved upon its last years scores on four of the five
parameters.

At a broader level, the survey indicates some drastic changes beginning to
take place in the satisfaction trends in the server market. CIOs now expect
vendors to be more aggressive and forthcoming in terms of domain knowledge and
responsiveness to their specific requirements. Price and commercial, which was
rated fourth in importance among the five parameters last year, has been rated
the second most important parameter this year.


Reduction in tolerance is viewed by Sun as an opportunity to modify and
enhance

Joyjit
Chatterji, country director, Services, Sun Microsystems India

What have
been some of your customer focused efforts? And, how are your global
practices assimilated in the Indian market?

Our
efforts have focused toward prevention with proactive management. Specific
initiatives have revolved around tracking of all cases once opened through
the various stages of process from initiation to closure. Each stage has
defined tolerance level and escalations are initiated if crossed. We have
also undertaken restructuring to focus on tier-2 customers with more regular
engagements. Other initiatives include proactive system health checks,
replacements, among others.

We have a
common global target for Customer Feedback Index (CFI) which is measured
every quarter. Best practices are customized to meet local needs but the
concept is to ensure consistent service quality irrespective of customer
location.

Post-sales is emerging as a critical
customer satisfaction imperative. How do you ensure customer satisfaction on
this count?

From an implementation and post-sales service perspective, simple
answers have been; adhere to time lines, ensure quality, ensure prevention,
rectify in case of issues and rectify quickly, and capture the learnings.

How are the dynamics of customer
satisfaction changing?

Rapid growth has been one of the key highlights of the Indian industry,
coupled with increased dependency on IT, compliance. Adherence to best
practices and high availability are some of the drivers. Customer tolerance
levels have reduced and perfection is becoming a natural demand.

This, then, is becoming challenging for
the vendors. How do you cope with it?

Reduction in tolerance is viewed by Sun as an opportunity to modify and
enhance. We have been making efforts to ensure we capture the needs early
for a customer/segment and have the optimum solutions. Our structure and
technology brings in the flexibility to mould ourselves to the customers
needs. The key success factor is pace of change that any company, which is
serving the demanding market, has to adapt to. The need of the hour is to
evolve continuously, assuming that what worked today may not work tomorrow.

Wipro and HCL fall way below the industry
average scores on the derivates of the two most important satisfaction
parameters of CIOs. Even though the respondents have expressed the highest
satisfaction with Suns responsiveness and domain understanding, their
satisfaction on these two grounds is still relatively much less as compared
to their satisfaction with the functionalities and reliability that Sun
offers with its products

Networking Products

The customer satisfaction trends in the networking products market are up for
some changes. The two important satisfaction parameters last yearproduct and
post-sales servicecontinue to retain their importance this year as well. But,
down the order, the market witnessed transformation in the satisfaction
patterns.

Price and commercial gave way to pre-sales and marketing as the next most
important satisfaction parameter. The increase in relative importance of
satisfaction parameter, however, doesnt necessarily mean improvement in
satisfaction score as well, which remained unchanged at 84.3 points.

While Cisco maintaining its top
rank is not a surprise, the real story is 3Coms rise. And, the interesting
bit is not so much to do with its jump from number 4 to number 2, but more
to do with the extent of its improvement in the satisfaction scorecard.
This, when all the other players, including Cisco, saw a fall (albeit minor)
in their satisfaction scores

The overall satisfaction of networking products among the users of
enterprises has increased by 0.6% (from 83.8 to 84.3) as compared to last year,
with the major contributors being improvement on the counts of delivery and
installation, followed by price and commercial.

The key highlight of the survey findings is the revival of 3Com, which moved
up two ranks (from four to two). More importantly, it is the extent of
improvement with which it has made it to the #2 spot. The claim to fame is not
just about making it to that position, but also being a thin margin away from
the tank ranker. Against market leader Cisco, its no mean feat.

Interestingly, 3Com is the only company to have improved its satisfaction
score, while all the remaining, including Cisco, witnessed a drop in
satisfaction scores over last year. The company improved its satisfaction from
80.4 points last year to the current 85.8 points. This has been contributed
mainly by clarity of pricing contract and TCO (price and commercial) and
demonstration and training (delivery and installation).

3Coms ascendance has been majorly
contributed by the companys ability to satisfy CIOs on the counts of
clarity of pricing contract and total cost of ownership (price & commercial)
and demonstration and training (delivery & installation). However, the not
so good news for the company is that it has fared below the industry average
when it comes to satisfying CIOs on the most important parameter of product

3Com has scored the highest satisfaction score on three of the five key
satisfaction parameters. This becomes significant when compared to the companys
performance last year, wherein it had scored the lowest on four of the five key
parameters. The management changes the company has witnessed over the last one
year may have something to do with the revival. Management changes could have
brought in new thinking, newer ideas and fresh focus on certain areas like
pre-sales and marketing.

Cisco, however, maintains its supremacy on the product and post-sales service
parameters. There is nothing to beat Cisco when it comes to product reliability,
functionality, and convenience in operation and adoption of the product.
Customers are also happy with its responsiveness to technical queries. However,
a cause for concern for the vendor is that CIOs have rated it lower than 3Com
when it comes to value for money, clarity of pricing contract, vendor
understanding/domain knowledge, demonstration/training and expertise to resolve
problem.

To
support critical customer networks, the post-sales vehicle is very
important

Tata
Rao, senior VP, Systems Engineering, Cisco, India & SAARC

How
proactive is Cisco on the customer satisfaction front?


Customer satisfaction has always been a core value at Cisco. The company has
been measuring customer satisfaction since 1992, through a formal and
stringent process. The customer listening team within Cisco manages a yearly
global customer satisfaction survey. It measures the customer sentiment
toward the companys account teams, products, services and partners,
involving nearly 100,000 responses each year. The customer feedback
collected by the team is analysed and addressed accordingly. In most cases,
specific action points are drawn-up with sign-off from customers, and then
acted upon followed by constant interaction with customers on those aspects.
This closed loop process ensures that we are able to immediately respond to
customer needs and address them completely and promptly.


What
are the key customer-related initiatives by Cisco?

Some of our major initiatives consist of effectively identifying
customer business requirements leading to product feature/software
enhancement on Cisco products; availability of a very strong Cisco channel
organization responsible for selling and implementation of Cisco products
and technologies to customers satisfaction; education initiatives for Cisco
channel partners and also customer training programs on various Cisco
products and technologies; availability of Logistics Centers in a large
number of cities in India; easy access to Cisco Technical Assistance Center,
24x7, for resolving any network related issue.

How are the customer satisfaction trends
changing in the networking market?

One of the most significant changes consists of requirement of more
product features for enhancing a service or business by customers. Another
emerging trend relating to maintaining customer satisfaction is the
capability of networking vendors to sell and implement the complete
solution, rather than disjointed products that are not integrated. This
requires specialized skills on various technology areas, and a clearer
understanding of the business and customer requirements, a skilled channel
and technology backing by the vendor itself.

What are some of the customer
satisfaction-related challenges faced by networking product vendors?

With the advent of newer technologies like unified communications,
video, mobility, IPTV, large campus networks, pervasive security
requirements, data centers, wireless cities, among others, the need to scale
the skill level and awareness of the entire community is another big
challenge. This requires a lot of investment in developing and rolling out
new training programs to spread technical awareness about the successful
implementation of new technologies and products.

Cisco maintains lead with a comfortable
margin over its competitors on a majority of the sub parameters of product
and post-sales servicethe two most important factors determining
satisfaction for CIOs. All said and done, it is also the only vendor that
has consistently scored above the industry average on all the derivates of
these two parameters, while 3Com has missed it on at least four counts

Enterprise Applications

In terms of satisfaction trends, enterprise applications has emerged as one
of the most dynamic markets. The fact that customer satisfaction is a close
competitive play, has made it even more imperative for enterprise application
vendors to align themselves to the changing trends to help meet and exceed CIO
expectations.s

So, what are the CIO expectations? Undoubtedly, he/she wants the most
reliable product with great functionality and ease of operation. Last year,
pre-sales and marketing, and price and commercial were the most important
factors for satisfaction after product. This is indicative of the growing
maturity of Indian enterprises in terms of the adoption of enterprise
applications.

As the enterprise moves further in its ERP/CRM/SCM journey, there is greater
focus for the CIO on aspects like installation and post-sales service. Going by
their responses, most enterprises now seem to be in the latter phase.

Customer satisfaction in the
enterprise applications market seems to be a very competitive play
considering theres not much variance in the satisfaction scores of the top
three vendors. However, what makes Microsoft Business Solutions coming on
top more interesting is the vendors relative improvement over its last
years scores, which is the highest as compared to its competitors

So, vendors now know where to focus their energies most on. But are they
doing so? Going by the survey result, it doesnt seem that theyre putting all
their energies in the right place.

Interactions with service team and adherence to SLAs have been voiced as
major concern areas on which CIOs would like their enterprise application
vendors to take action on. On the other hand, pre-sales and marketing has ended
up making CIOs most satisfied (with 87.5 points). Vendors need to re-visit their
customer satisfaction strategy and make sure that theyre not putting their eggs
in the wrong basket.

The rise of Microsoft Business Solutions has
been contributed primarily by vendor understanding/domain knowledge of
business (pre-sales and marketing) and clarity of pricing contract (price &
commercial). This is one of the segments where all the vendors, with the
exception of one (Ramco), have performed better than the industry average

The growth in the overall satisfaction level in the enterprise applications
segment has seen the highest growth among all the eight segments being surveyed.
Last year, enterprise applications was among the most affected by the dip in
satisfaction levels. It made a revival with the overall satisfaction of
enterprise application users increasing by 1.79%. In terms of vendor rankings,
SAP has conceded its top position to Microsoft Business Solutions, though only
by a mere 0.2 points score. But, what assumes greater significance is the
relative improvement in Microsofts performance over the last year as compared
to SAP. While the former grew from 81.4 points in 2007 to 86.5 points in 2008,
the growth for SAP is from 84.7 points in 2007 to 86.3 points in 2008. Oracle is
closer behind at 85.8 points, up from 83.9 points in 2007.

The improvement in Microsofts satisfaction scores was mainly due to CIOs
high degree of satisfaction with the vendor with respect to understanding/domain
knowledge of their business (pre-sales and marketing) and clarity of pricing
contract (price and commercial).

The companys change in licensing policy with the intention of making it
simpler seems to have paid off. Another plausible reason can be the vendors
efforts at scalability and product improvements in the last 2-3 years. This
apart, it also enjoys the rub off of the overall Microsoft brand. As a result,
the overall brand recall is much higher.

For Oracle, overall product performance, scalability, and geographical reach
to provide service are issues with its customers. On the other hand, SAP has to
work harder on improving the convenience of installation/adoption, greater
clarity in its pricing contracts and responsiveness to technical queries.

The
concern of the customer is not pricing but the total cost of ownership

Sushant Dwivedy, director,
Microsoft Business Solutions, Microsoft Corporation India

What is
your strategy with respect to customer satisfaction?

The moot point when you take on any customer-related initiative is that
it is a long-term play. When we had taken over from Navision, we had
institutionalized customer satisfaction and motivated the channel to drive
customer centricity. And, over a period, created the framework.


What
are some of the specific customer centric programs that you have undertaken?

One of the top things was the business ready enhancement plan, wherein
we set up the customer portal. The portal provides training free of cost to
the customers employees. This is for the customers who sign up for the
enhancement plan. They also get updates on the licensing they have, when
does it need an upgrade, and next product releases, among others. We have
also institutionalized a Partner Advisory Board Meeting to take in the
partners feedback. We initiated a project, Project Khush Kustomer,
wherein we went back to customers and checked the reason for any
dissatisfaction they had, and then worked backward.

What are the factors critical to
determining satisfaction of the customer in the enterprise applications
space?

We have been observing that for the customers, it is not just about the
depth of functionality but also about the usability and ease of use of the
software. Secondly, when enterprises are buying ERP, they are looking for a
long-term relationship with their vendor. Therefore, post-sales gains a lot
of significance for them. Verticalization is another key for users in the
enterprise applications space. As a result, we focus on micro verticals and
work extensively with our partners for orienting the product for particular
niches.

Enterprise applications is another segment
wherein CIOs dont just demand a reliable product with good functionality,
but also want the vendor to have the ability to resolve problems and be
available post the implementation as well. This can be because enterprise
applications generally require a long-term relationship with the vendor.
While Microsoft has reasons to celebrate, a cause for concern for the
company is the low satisfaction level CIOs have expressed with the security
aspects of its product

IT Services

For IT Services, the customer satisfaction trends are moving in line with the
maturity of that market segment. Indian CIOs, today, are giving a lot of
importance to aspects like adherence to SLA/QoS, technical expertise, solution
orientation, responsiveness and availability, ability to deal with crisis, etc.
A good and wholesome post-sales experience is, therefore, a must. However, the
satisfaction for customers on this very count is the lowest among all the four
satisfaction parameters.

Among the areas where CIOs are particularly less satisfied are: adherence to
SLAs, turnaround capability, solution orientation, and routine checks by their
IT service provider. CMS, HCL Infosystems, HP, and IBM seem to be the most
afflicted by the SLA factor. Sales and marketing/pre-contract stage experience
has become the least important criterion for them this year.

Customer satisfaction in the IT
services landscape is reflective of the dynamic nature of the market itself.
As per the survey, there have been some significant upheavals, rises as well
as falls, with Sify, CMS, and HP being at the receiving end of the changing
satisfaction patterns of CIOs

The overall satisfaction of IT services users of enterprises has increased by
1.6% due to increasing satisfaction on all the four satisfaction parameters. IT
services has witnessed the second highest growth this year.

Interestingly, two of the top three vendors from last yearWipro and HPhave
failed to make it to the top three. On the other hand, HCL Infosystems and Sify,
which had performed below the industry average in 2007, have shown above average
performance this year. CMS, Sify, and HCL Infosystems have witnessed the maximum
movement upward in terms of ranks. Sifys rank has improved from #6 in 2006 to
#3 due to satisfaction on parameters like ability to support multi location, SLA/QoS-related
commercial terms and adherence to QoS/SLA, geographical reach to provide
post-sales service, and availability of required spare parts (post-contract
stage experience) have been the major contributors in increased satisfaction
this year, while CMS has improved upon proactiveness, responsiveness, and reach.

Even though managing to make it to the number 5
position, the relative growth in CMS customer satisfaction score over the
last year has been the highest, thereby emerging as the dark horse not to be
ignored. On further analysis, we find that the satisfaction on aspects like
proactiveness of the service provider in understanding the specific
requirements (sales & marketing/pre contract stage), clarity of pricing
contract (price & commercial) and geographical reach to provide after sales
service and responsiveness and availability of service personnel
(post-contract stage experience) have been the major contributors in the
rise of satisfaction levels for CMS

Customers lay a lot of stress on transparency and creativity

Sanjay Gupta, director,
Customer Support Operations, HCL Comnet

What
initiatives have been undertaken by HCL Comnet to ensure customer
satisfaction?

This year we launched the CSAT Survey through the external agency, IMRB
International, to identify our critical improvement areas and proactively
initiate actions to better our services. Also, we organized periodic
customer meets across the country to educate our customers about the trends
in the latest IT infrastructure services domain.


What
factors are becoming imperative to customer satisfaction in the IT services
market?

Customers lay a lot of premium on transparency and creativity. They want
to be continuously informed about what is happening inside their system and
in the outside world. Hence, they expect their vendor partners to be a mix
of consultants and executioners. Besides, technological competence and cost
competitiveness are crucial factors for customer satisfaction in the IT
services space.

What challenges do vendors face in India
when it comes to customer satisfaction?

Delivering customer expectations cost effectively and within stiff
deadlines are some of the challenges in the IT service delivery space.
During project implementation, customers also demand real time visibility on
the project phases and proactive alerting of any future roadblocks.

How are IT services models affecting
customer service?

There are two clear trends we are witnessing in India. Firstly, there is
a growing acceptance of the need for standardized processes in IT
operations, and with our experience in delivering globally renowned remote
management services, we are well poised to address this need in the most
cost-effective manner. Today, HCL Comnet is managing over a million devices
from its service centers, and such volumes can be effectively handled only
through standardized tools and processes. Secondly, customers increasingly
demand one SLA for the entire infrastructure (be it networks, data center or
applications), rather than a siloed approach. That is where HCL, again,
thanks to its breadth across the IT service spectrum, is well poised to
offer and manage a single SLA for the customer.

The verdict of the survey for IT service
providers is to provide a better experience to their customers once the deal
is through, considering CIOs are not very satisfied with them on many
attributes. In effect, CIOs are looking for a more responsive service
provider with a solutions-based approach. In fact, the major areas of
concern leading to the drop in ranking of HP Services are related to
dissatisfaction on the counts of routine checks and preventive nature,
responsiveness and availability of service personnel

Laser Printers & MFDs

The overall satisfaction (83.1) of laser printers and MFD users of
enterprises has been boosted by satisfaction on overall product features,
followed by delivery and installation. As per the survey findings, the overall
satisfaction in this segment has been the highest among the government and
education users and the lowest among services users.

In this segment, HP is one of the few examples of vendor satisfaction
performance falling in line with its market share. Even while expanding its
footprint, HPs focus on customer satisfaction has not been diluted, as is
proved by the findings of the CSA-2008 survey. More importantly, the company
maintains a lead over its closest competitor with a good margin. The next in
rank, Canon and Epson (joint second rankers), are 4.3 points away.

Though not with a huge margin,
HP, nevertheless, maintains a clear lead over Canon and Epson in terms of
customer satisfaction in the laser printers and MFD segment. Laser printers
and MFDs is the segment with the third lowest satisfaction score among the
eight segments being surveyed, thereby indicating that its becoming
increasingly tough for vendors to get in sync with the expectations that
their customers have from them

In fact, HP is the only vendor that has performed above the overall industry
satisfaction score and also the only vendor to have upped the industry average
on four of the five satisfaction parameters. The only exception is price and
commercial, where Epson is giving close competition to HP on price
competitiveness. The former slightly edges over the latter on TCO with a score
of 83.9 points as compared to HPs 83.5 points. Epson is again almost at par
with the top ranker on the clarity of pricing contract (Epson81.3 points and
HP81.5 points). But, CIOs perceive HP to be bringing in more value for money on
the table as compared to Epson.

Indian CIOs are giving a lot of importance to factors like timely delivery,
training and hand holding, responsiveness, availability of spare parts,
expertise to resolve problem, and interaction with the service team.

The top of the line in terms of importance is reliability, functionality and
convenience in operation offered by the product. But, features like print and
processor speed dont bother the enterprise users as much as intelligent and
value-added features like toner management, etc. Plain vanilla printing services
are no longer enough to satisfy customers. Theyre expecting their imaging and
printing vendors to provide services like auditing, optimization, etc.

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