A quiet ten and still more hope

The dictionary defines satisfaction as the act of fulfilling a
desire or a need. And many a marketer has failed to find the perfect formula to
satisfy the customer, who Sam Walton very eloquently described as the ‘only
boss.’ The one who can fire anyone in the company–from the Chairman to rank
and file–by simply spending his money somewhere else. As long as this one boss
is satisfied, the cash register will keep ringing.

Satisfaction ratings have come to occupy a very important place
in the marketers’ arsenal of tools when reaching out to a new prospect and
this is precisely what the ‘Dataquest-IDC India Customer Satisfaction Audit
(CSA) 2004’ tries to do. In its second edition, the CSA has evolved to add a
few new parameters that help get a better fix on the CIO’s satisfaction level.

Like last year, CSA tries to gauge the levels of satisfaction of
the five key categories namely desktops, notebooks, servers, ente-rprise
applications and IT services.

Desktops

The two top concerns on the CIO’s mind during the desktop purchase process
are the product itself and post-sales support. The key concerns for the CIO,
when thinking about product features, are product reliability and overall
product performance, followed by ease of integration with the existing setup and
warranty/replacement schemes.

The overall satisfaction delivered by most desktop vendors,
lies within a very thin range indicating what in cliched ‘industrywallah’
jargon is very tough competition.

HCL’s scores on both of the top two parameters–product
features and post-sales support–rate above the average industry expectations.
So it comes across as no surprise that HCL tops the tally this year, but only
just. Close on HCL’s heels is another Indian PC vendor, Wipro. The HP-Compaq
combine takes the third position. Last year, they featured as different brands
but a combined average of their scores would have placed them at an identical
position.

What really swings the scores in HCL and Wipro’s favour are
their consistent scores in the pre-sales and marketing and the delivery and
installation parameters, where they either match or beat industry expectations.
IBM too fares much below the average expectation of a CIO.

But the one obvious question that needs to be addressed is
the reason for IBM’s fall from grace. From the No 1 position last year to
sixth this year. Last year, IBM volumes jumped substantially and with
after-sales support and service outsourced to third party service providers, IBM’s
direct control over the quality of service is lower, especially in upcountry
markets. A quick look at the numbers tell a similar story. IBM’s relative
performance in after-sales support is lower in comparison to the industry
expectation, while as far as pre-sales and marketing goes, IBM’s relative
performance is higher.

With the customer’s expectation about level of service much
higher with premium brands like IBM and therefore, a small deviation in
standards stands amplified. Couple this with their growing installed base, its
fall was inevitable. However, this brings wrapped beneath its wings, an
opportunity for IBM to engage these customers in service recovery.

Notebooks

Like desktops, the key factor that occupies the CIO’s mind during the
purchase process for notebooks is the product itself and the CIO is also
influenced by the pre-sales and marketing efforts of the vendors. And the cliche
continues, even when rephrased it would still mean that competition is very
tough. IBM retains the top position in this category, but the margin is thin.
And very close behind IBM is the HP-Compaq combine, which have dislodged Toshiba
from the second spot. Again, the differe-nce in the satisfaction scores is thin.
Incidentally, HP did feature last year and Compaq actually occupied the third
spot. Toshiba now stands a notch lower at the third position.

The CIO despite placing the least importance on the price and
commercial terms offered, incidentally is least satisfied with this parameter. A
surprising development from last year is that the importance placed on pre-sales
and marketing from occupying a position of least importance, is the second most
important factor today. A plausible explanation is that rapidly changing
technology is burying even the well-informed CIO under a mountain of
information.

The CIO is inundated with numerous choices concerning
products, applications, services and you name it. Able marketers with a firm
grasp about the abilities and weaknesses of their products can help make life
easy even for an informed customer. It is no coincidence then that the entire
world is now talking about consultative selling. And, it is here that the
marketing skills bulwarked with the right product can make a difference. While
the marketer will have little control in sustaining product differentiation, the
value that they bring to the table will largely stem from the ability to
retrofit existing products to tailor new solutions.

Toshiba’s No 3 position could largely be explained because
of marginally lower-than-average satisfaction scores on two key parameters–product
features and pre-sales and marketing. While product itself includes
sub-parameters like reliability, performance and maintenance, ease-of-use and
warranty replacement schemes; pre-sales and marketing includes sub-parameters
like responsiveness to specific requirement, domain knowledge, proactiveness in
understanding needs and quality of interaction.

However, Toshiba’s performance on the price-product parity
and commercial terms offered beats the industry average but that hardly helps
Toshiba’s cause for the CIO relatively does not place as much importance on
this parameter.



 The average industry expectation on
all the studied parameters, no other company in this category has matched that.
But even then HP-Compaq’s top showing comes through just by a whisker,
essentially because HCL’s satisfaction score on both the product features and
price-performance parity (the top two concerns for the CIO), are not only higher
than the industry average, but better than HP-Compaq.

And in the price-product parity and commercial terms offered
parameter, Intel architecture servers clearly outperform Sun, which incidentally
just about manages to meet the industry average.

Like in desktops, post-sales support emerges as one of the
top two concerns for the CIO followed by influence of pre-sales and marketing,
for the initial handholding, as is commonly referred to, is what helps the CIO
get the right fit for his company.

Like in the laptop category, the CIO’s satisfaction with
the price and commercial terms is also the least here. This seems logical,
especially when the satisfaction scores on the pre-sales rank higher than
post-sales, which incidentally is the second most important thing on the CIO’s
mind for servers typically moving into mission-critical areas.

Enterprise applications

SAP retains the top spot, while last year’s runner-up Baan is out of the
top three. At No 2 is Oracle, followed by Peoplesoft/JD Edwards. While arriving
at a decision for enterprise applications, the two most important parameters
that influence a CIO are product features and the pre-sales and marketing. And
interestingly, price and commercial terms come across as an attribute that is
relatively not as important, and yet the levels of satisfaction on this
parameter stand the lowest. SAP’s emergence at the top of the pack is a
greater satisfaction score on product attributes. The scores on the pre-sales
and marketing parameter are spread not very far apart.

The spread of the overall CSA Index for this category also
indicates that the IT industry is a tough one to be in. Baan getting knocked off
from the top spot is a result of more than one force. Baan’s overall
performance is lower than the average industry satisfaction score on the CSA
2004 Index for enterprise applications, unlike last year where it outperformed
the industry average. A quick look at the index will tell you that Baan in the
last year has not been able to achi-eve even the ave-rage industry satis-faction
level in any of the parameters that define satis-faction for enter-prise
applications. Add to that the fact that the process of recovery has been more
aggressive by other players populating the industry. Oracle, for instance, which
showed results much below the industry average last year, actually outperforms
the industry average this year around.

While the key considerations are product attributes, the
relative impor-tance of the sec-ond most impor-tant feature, pre-sales and marke-ting–ranks
way below the product attributes. This is unlike last year, when both of these
parameters got an almost equal importance from the CIO.

IT services

CMS, the vendor at No 8 last year, has zoomed all the to the top this year.
At No 2 two is Wipro jumping up four places. Surprisingly the toppers of CSA
2003, TCS and IBM Global Services have taken a huge knock to drop to places six
and seven respectively.

HP Services at No 3 three has been the only one to have
maintained its position. While the CIO of last year was pre-occupied with the
quality of service and technical expertise of the service personnel, this year
around the CIO’s top concerns are the engagement in the pre-contract stage and
the service offering aka quality of service.

TCS outshone each one of its competitors in the last year’s
edition of the CSA and emerged at the top of the table for each of the
parameters mapped. Unlike last year, CSA Index 2004 for IT services reads like
an entirely different story. Out of the four main parameters studied, TCS fails
to make the average industry grade in two. This also could be due to the
inflated expectation of the brand that TCS has come to become. So it can a rerun
of the IBM story for desktops. What it means is that even a small deviation also
from the expected level of performance by TCS will lead to a disproportionately
higher fall in satisfaction levels. Club this with the fact that other players
in the arena have shown a marked improvement in their respective performances
relative to the industry average. And a final look at the overall CSA Index
reveals the exact same picture. Competition is as hot as can be!

Mohit Chhabra 

Research and analysis by Tirthankar Sen, Senior Market
Analyst (end-user research), IDC India Ltd