Early last month, I wrote a predictions piece here where I asked:
“Will Bad Behavior Get Rewarded? – I had more than a few interactions last year with IT and user executives when the subject of their dissatisfaction with their current ERP vendor came up. No surprise these customers complained of too many software audits, no price relief during the recession even though their company/headcount shrank, etc. Will business software buyers have memories like elephants and kick these hooligans to the curb or will they suffer from ERP Alzheimer’s and re-up with these vendors? This is a huge opportunity for new firms to take market share from older vendors but they’ll only be successful if they offer a better customer experience.”
With only a month or so into the New Year, I’ve seen some interesting data points. In a study completed by Radius for CPM (corporate performance management) vendor Host Analytics, some 400 accounting and finance professionals were questioned as to their satisfaction with their CPM solutions. CPM software often includes budgeting, planning and forecasting solutions and may be part of a larger ERP suite. Financial consolidation and other functions may also be included.
The survey results were dispiriting for on-premises solution providers. While major players (e.g., Cognos, SAP and Oracle/Hyperion) had high user awareness rates, their overall satisfaction scores lagged those of leading cloud solution providers. Likewise, Net Promoter Scores showed a similar result.
The survey also looked at other factors like:
- Solution is fast and easy to implement
- Provides excellent customer service and support
- Is easy to use
- Adapts as business changes or grows
- Provides good value for the money
The bottom line: 26% of one vendor’s customers plan to migrate to another solution within 12 months.
So why are these customers’ so blue?
Well, the answer may be found in a couple of sources. ERPNews reports that:
“Four fifths (80%) of the 1,500 business professionals surveyed globally say their ERP system is critical to business performance and 60% have invested in the software in the past two years. However, over half rate their current ERP as just ‘adequate’ or ‘basic’, with the number in the UK dissatisfied with ERP nearly 10% higher than the average.”
Panorama Consulting Solutions publishes an annual state of the ERP report (PDF download) that notes that while ERP general satisfaction levels remain high, there are still large numbers of customers who wouldn’t describe their ERP project as a success. They report that almost one in five projects was a failure.
I would suggest that dissatisfaction is something that accumulates over the life of the ERP solution experience. Whether an initial installation starts off poorly or not, it’s the interaction (financial, personal, business, etc.) between the vendor and the customer over time that really defines the experience. It’s this customer experience (CX) that ERP vendors should be focusing/should have focused on for years.
Chances are your firm has a number of scorecards in use. Personnel may be evaluated on their ability to meet certain objectives that are tied to operational, financial, managerial and other goals. Suppliers are often measured against their ability to meet specific service levels. But who creates a scorecard for their ERP vendor? Shouldn’t every business do this?
Business leaders need to create an objective scorecard in evaluating their ERP vendors and their ERP customer experience. Such a scorecard would go a long ways to providing a clearer communication dialogue within the executive team and between the customer and its ERP provider.
The first step in such an effort though should be to get a baseline of where the company sees its experience with the ERP vendor to be today.
I’ve added the following charts to help executives kickstart the process.
The factors in the graphics above are continual forces impacting the ERP customer experience. Yes, there are significant one- time events (e.g., software installation and contract negotiations) and they should also be added into the mix. But it’s the cumulative effect of all kinds of interactions that define the ERP CX.
When I spoke with a cloud-HCM vendor executive this morning, she expressed great enthusiasm for her firm’s mandate to put huge emphasis on the ‘service’ part of software-as-a-service (SaaS). I told her that some old-school firms think SaaS stands for software-as-a-subscription (where you package up the miserable ERP CX into easy monthly payments). Service should be job one of software vendors but many would need an empathy gene to understand that.
If you still think your ERP provider is just aces from a CX perspective, ask yourself these questions:
You see, how you view your ERP CX depends a lot on where you sit. If you had to negotiate (or re-negotiate) with them, you’ll likely feel one way. If you had to implement it, you’d feel differently, too. Likewise for those who are still waiting for the functionality or re-platforming promised back in 2004. Perspective is everything. This is why a company needs a single, comprehensive ERP CX scorecard for all affected parties (including users) to complete.
Once completed, call your ERP vendor rep for a really frank conversation. When they ask if you’ll be implementing their all-new cloud solution (due out sometime in 2021), tell them you won’t unless they do something material about their scorecard values.
Remember: Lock-in is not the same thing as customer satisfaction. Does your ERP vendor understand this?
Disclosure: SAP and Oracle are premier partners at time of writing
Graphics credits: Brian Sommer, TechVentive Inc., featured image: Mark Skinner © Fotolia