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Description:
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As enterprise buyers seek to simplify their IT operations through consolidation,
the competition to become a preferred provider is heating up. For both
vendors and integrators of enterprise software applications and services,
success rests on the ability to build awareness and credibility, reach
the right buyers with the right messages, and demonstrate proof of value
delivered.
ITSMA’s Enhancing Customer Value from Enterprise Software Applications benchmarks
the brand equity of full-suite application providers, integrators, and
niche application developers across five major application categories.
It also explores the customer decision process for buying enterprise
software applications—both for the market as a whole and for the
following specific applications:
- Enterprise resource planning (ERP)
- Human capital management (HCM)
- Customer relationship management (CRM)
- Supply chain management (SCM)
- Business intelligence/analytics (BIA)
In particular, the study addresses issues such as:
- What priorities drive the decision-making process when large and
midsize firms and institutions buy business software applications and
services?
- How do buyer knowledge and impressions of and preference for services
providers vary across and within the major categories of enterprise
application software?
- What marketing investments will be most effective in building brand
and improving competitive position?
Key topics and trends highlighted in the report include:
How Customers Choose
- Do buyers evaluate solutions based primarily on the features and
functionality of the software or on the quality of the services
provided?
- Do buyers prefer full-suite providers or application specialists?
- Do buyers want to work directly with software vendors or with third-party
integrators?
Brand Equity
- Which software application solutions have the highest brand equity?
- How familiar are buyers with specific enterprise application software
firms?
- Do niche vendors, full-suite providers, or third-party integrators
score higher in terms of favorability?
Effective Marketing
- What are the most important vendor attributes?
- Which companies are meeting customer expectations?
Purchasing Preferences
- How popular is outsourcing, application hosting, and offshoring?
- How do buyers prefer to manage their enterprise software applications?
- Are customers seeking rapid-method implementations?
Study Scope
ITSMA’s Enhancing Customer Value from Enterprise Software Applications focuses
first on the enterprise application market as a whole, exploring the
impact of:
- Software application category. ERP, HCM, CRM, SCM, and BIA
- Job category/perspective. IT, business
- Industry. Government, financial services, manufacturing, retail/distribution,
communications, other
- Size of company (number of employees). Ranges are 100–999;
1,000–4,999; 5,000 or more
- Stage of implementation. Pre-implementation, currently implementing,
post-implementation
- Preferred degree of vendor specialization. Full-suite or specialist
When asked to evaluate brand equity, attributes, and positioning, interviewers
directed respondents to focus on nine full-suite providers plus two specialist
firms in each of the software application areas. (Note: Data was collected
prior to Oracle’s recent acquisition of PeopleSoft.)
- Full-suite providers or integrators. Accenture, BearingPoint,
Capgemini, IBM, Microsoft, Oracle, PeopleSoft, SAP
- ERP specialists. Intentia, Lawson
- CRM specialists. Avaya, Siebel
- HCM specialists. Kronos, Workscape
- SCM specialists. I2, Manugistics
- BIA specialists. Cognos, Hyperion
Study Methodology
ITSMA conducted telephone-based interviews in the United States with
501 IT and business executives involved in the purchase of software applications
and solutions. ITSMA designed the interviews, which took place from late
2004 through early 2005, to assess the brand awareness and market positioning
of the major software application services providers and explore key
market drivers. The survey instrument resides in the study's appendix.
Study respondents all held director, vice president, or C-level positions
and represented organizations in multiple major industries with revenue
or operating budgets ranging from $300 million to over $20 billion.
The study was sponsored by IBM, SAP, and Capgemini.
Respondent Demographics
Job Title |
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Director |
66.7% |
Vice President |
26.3% |
General Manager/CXO |
7.0% |
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Industries Represented |
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Manufacturing |
29.9% |
Government |
20.0% |
Financial services |
20.0% |
Retail/distribution |
6.8% |
Communications |
5.0% |
Other |
18.3% |
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Application-Specific Findings: Spotlight on Five Modules
For each of the five categories listed below, ITSMA interviewed a different
100-person subset of its 501-person sample based on their decision-making
involvement with the various application types. Participants in each
of these "mini-studies" were asked their opinions and perceptions
of nine full-suite providers and integrators along with two application-specific
specialist firms.
Sample Topics Addressed in the Modules
How Customers Choose
- ERP: Vendors vs. integrators: Is there a clear-cut preference?
- CRM: When seeking implementation assistance, do customers prefer
to work with vendors, integrators, or in-house staff?
- HCM: How many companies are planning to upgrade their applications
or add to them?
- SCM: Who exercises more clout in the purchase decision: business
or IT?
- BIA: Which verticals are more likely to build custom BIA applications
than buy them?
Brand Equity
- ERP: How will the combined PeopleSoft and Oracle entity affect SAP?
- CRM: Is IBM catching up to Siebel in this market? What about the
combined PeopleSoft/Oracle?
- HCM: Which verticals are the various HCM providers penetrating effectively?
- SCM: Are specialist vendors better positioned than the software giants?
- BIA: Which firms do buyers call first when they're looking for a
BIA solution?
Effective Marketing
- ERP: In an environment where purchasing is driven more by IT than
business, what are the messages and attributes that resonate?
- CRM: What are the most influential factors in how customers perceive
the value of CRM solutions?
- HCM: Are certain vertical industries likely to be more satisfied
with their HCM providers than others?
- SCM: Are expectations outpacing performance? What can providers do
to remedy the situation?
- BIA: What can other companies learn from Accenture's strong positioning
in this space?
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