Future Satisfaction Comes From Today’s Customer References

I’m in the middle of doing a Web survey of SAP users to gauge their levels of satisfaction with theirenterprise resource planning vendor, and an interesting dynamic is starting to emerge.

More than any other factor, customer references influenced buyers to choose SAP, quelling their concerns about the potential risks involved in taking that step. In fact, at this point in the survey, 80 percent of respondents said they relied on customer references during the ERP decision-making process.

Admittedly, the 4,500 SAP users who received the e-mail invitation to participate are the party faithful, and their jobs are dependent to a large extent on SAP adoption in their company. Still, the results to this point are fascinating.

Following are some preliminary results from the survey that will eventually be reported in the “SAP Customer Satisfaction Report: 2006.” These are not statistically significant findings, and I am paying for this survey entirely out of my own pocket. SAP is not funding this, and neither is Oracle or any other vendor. I wanted to keep it that way to keep the research agenda, questions and analysis free from any vendor influence.

Love-Hate Relationship

• A majority of respondents (63 percent) were affiliated with companies that had considered Oracle but then went to SAP for their ERP system. These companies also considered JD Edwards, PeopleSoft, and QAD as well.
• So far, 26 percent of the survey respondents mention some interest in Oracle’s Fusion. One respondent, however, said that Fusion “will take years to complete and roll out as a stable enterprise platform.”
• A trait that the majority of satisfied SAP customers have in common is an appreciation for the ERP vendor’s expertise in their specific industries. One respondent said, SAP “knows my business.” The high correlation with future customer satisfaction is fascinating. It indicates that many SAP users are relying more on customer references than any other source of information to set their expectation levels of what SAP will ultimately deliver to them. One wonders if there is a “halo effect” inducing prospects to overlook the negative in favor of the positive once they get solid evidence of performance in their verticals.
• When asked what they are most dissatisfied with, respondents — so far — are mentioning SAP’s services pricing most often.
• Evidence of a fascinating behavior is emerging in the responses of the participants. They either love or hate SAP; few are occupying the middle ground, based on their comments. This polarity is underscored by their willingness or unwillingness to recommend SAP. Nearly 30 percent say they definitely would, 24 percent would with reservations and caveats, and 20 percent would not. What this suggests is that the most-satisfied SAP users are responding to the survey; those in the middle level of satisfaction are less likely to participate.
• Asked what they would change about SAP, the majority of respondents to date say they would like a revamped user interface. That’s no surprise, as the majority of respondents are on an R/3 system.
• There is a higher-than-average level of interest in NetWeaver (53 percent) among the respondents at the present time. None of the them have yet said they are not interested in NetWeaver; however, a few respondents have opted out of this question. That seems to point out the need for even more education about NetWeaver overall.
• When one starts looking at what is driving SAP satisfaction levels, user references, integration expertise and knowledge of specific verticals, taken together, are cited by more than 90 percent of the most-satisfied customers. User references correlate with the highest satisfaction levels of respondents to this point in the survey.
• The ability to customize applications doesn’t contribute to over-the-top customer satisfaction — in fact, it seems to relegate customer satisfaction scores to the “somewhat satisfied” category. Perhaps SAP users get an idealized notion of what they can accomplish with application customization through demos and references. As a result, this may be where it is toughest to exceed expectations during SAP rollouts.
• Another interesting dynamic emerging from the survey results is the fact that among SAP users who considered Oracle, many felt that its integration and product customization expertise was on par, or even better, than SAP’s. Nevertheless, they chose SAP due to more perceived knowledge of specific verticals, as well as more-advantageous licensing and pricing.

There are going to be many more insights gained from this report, as I’ll continue running the Zoomerang survey through February 15th. I felt compelled to write about the interrelationship between customer references and satisfaction, because so many vendors stress the interrelationship between customer references and satisfaction, but they rarely see the results.

In the world of SAP users, references from other companies in the same verticals played a big role in shaping customer expectations and influencing what they were able to accomplish as their rollouts progressed.