© Evalueserve, 2006. All Rights Reserved - Privileged and Confidential Study for Identifying...

23
alueserve, 2006. All Rights Reserved - Privileged and Confidential Study for Identifying Potential Sales Opportunities

Transcript of © Evalueserve, 2006. All Rights Reserved - Privileged and Confidential Study for Identifying...

© Evalueserve, 2006. All Rights Reserved - Privileged and Confidential

Study for Identifying Potential Sales Opportunities

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 2

1. Study Background and Objectives

2. Research Methodology

3. Key Findings

4. Sample Demographics

5. XYZ Usage

6. Future Plans (Upgrades and IT Installations)

7. Satisfaction Level and Need Gaps

8. Summary

Contents

CONTENTS

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 3

Study Background and Objectives

The client has been in stiff competition with XYZ in the ERP applications market. The client has launched a sales program, targeting companies that are currently using XYZ.

The study will help the client to:

1. Identify sales opportunities among the XYZ users2. Identify other opportunities such as database applications used by XYZ users3. Evaluate satisfaction levels and pain points for XYZ users 4. Identify their willingness to continue with XYZ ERP system or to shift to any other

ERP system.

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 4

Research Methodology

•The study involved conducting primary research with the senior management and IT decision makers of companies using XYZ, in the APAC region.

•Evalueserve and the client designed a structured questionnaire and conducted a telephonic survey with the XYZ installed base (provided by client) in a phased manner

•Fieldwork Pilot Stage – Evalueserve conducted 71 interviews with an initial questionnaire

•Questionnaire revision based on pilot results

•Fieldwork Main Stage – Evalueserve conducted 360 interviews

•Respondents were screened on their involvement with decision-making on ERP systems within their organizations.

•A representative mix in terms of country, industry and company size was maintained.

•Raw data was collated, cleaned and analysed to draw key insights.

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 5

Key Findings

•XYZ users face a series of difficult and costly upgrades. This implies significant opportunities for the client’s sales program

•Most XYZ users feel “locked in” by large sunk costs or contractual obligations

•XYZ users are largely unaware of low cost migration options

•The client has a potential target segment comprising customers using older XYZ versions

•Action points for client

•Strong sales communication

•Focus on flexible licensing terms

•Focus on key target segments

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 6

Key Markets

Korea3%

Australia17%

India25%

China15%

Hong Kong9%

Singapore12%

New Zealand

3%Malaysia

3%

Indonesia0.2%

Taiwan6%

Philipinnes4%

Thailand3%

N=431

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 7

Target Companies by Size

Company Size (By employees)

Company Size (By Revenues in USD)

N=298N=358

15.0%

40.0%

25.0%

20.0%

0%

10%

20%

30%

40%

50%

< 500 500-999 1000-4999 > andequal to

5000

15.0%

30.0%

35.0%

20.0%

0%

10%

20%

30%

40%

50%

< $50 Mn $50-$99Mn

$100-$499Mn

> andequal to$500 Mn

N excludes respondents who refused to answer or were not aware of the figures

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 8

Target Companies by IT Spending

50.0%

10.0%15.0%

5.0%

20.0%

0%

10%

20%

30%

40%

50%

60%

70%

< 1% 1 - 3 % 3 - 5 % 5 - 10 % > 10 %

15.0%

30.0%

10.0%

35.0%

10.0%

0%

10%

20%

30%

40%

50%

60%

70%

< 10% 10-20 % 20-40 % 40-50 % >50 %

IT Budget (as % of total revenues)

Spending on XYZ(as % of IT budget)

N=166N=194

N excludes respondents who refused to answer or were not aware of the figures

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 9

XYZ User Licences and Versions

Number of User Licenses

1%

1%1%

1%2%

3%

3%3%

4%7%

8%27%

35%

3%

0% 10% 20% 30% 40% 50%

Others

Version 13

Version 12

Version 11

Version 10

Version 9

Version 8

Version 7

Version 6

Version 5

Version 4

Version 3

Version 2

Version 1

XYZ Versions Used Currently

Number of Licenses

%

< 100 30%

100 – 500 40%

500 – 1000 20%

>1000 10%

XYZ Installation

Tenure

N=379 N=406

Age %

< 1 Year 11%

1–3 Years 38%

3–5 Years 28%

5-7 Years 20%

> 7 Years 3%

N=419

• ‘Version 1’ and ‘Version 2’ are the most commonly used XYZ versions

•On an average, most companies have between 100–500 licenses and are using their current XYZ application for about 1-3 years

•More than 75% of organizations go for a version upgrade after 5 years, and only 3% continue with the same version for more than 7 years

N excludes respondents who refused to answer or were not aware of the figures

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 11

Databases Currently Used

14%

16%

18%

20%

22%

10%

0% 20% 40% 60% 80%

Others

Company 4

Company 3

Company 2

Company 1

Client

For XYZ For Other Applications

N=387N=402

14%

16%

18%

20%

22%

10%

0% 20% 40% 60% 80%

Others

Company 4

Company 3

Company 2

Company 1

Client

• Client’s database is used by 22% of respondents• A significant 20% of the XYZ users use Microsoft SQL server for their other applications

N excludes respondents who refused to answer or were not aware of the figures

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 12

Upgrade Plans

15%

20%

20%

40%

5%

0% 10% 20% 30% 40% 50% 60% 70%

Currently engaged in implementing upgrades

Engaged in talks with XYZ regarding upgrades

Thinking of upgrading our ERP systems, but we have not decided on the supplier

Thinking of upgrading our ERP systems, but we have already decided not to go with our

current supplier

We do not have plans to upgrade in the near future

N=431

Technical Functional

73% 27%

Nature of Upgrades

N=160

• 40% of the XYZ users are either in the process of implementing their upgrades, or are still in the decision making stage

• 20% of respondents have decided to switch suppliers or are undecided

• 73% of those who are in the implementation stage or are deciding on upgrades, are implementing technical upgrades

Client Opportunities

Potential targets for sales communication

N excludes respondents who do not have plans to upgrade in the near future & those who are not aware

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 13

Timeframe for Upgrades

• More than half of the respondents have an upgrade horizon of 6 months or more

N excludes respondents who do not have plans to upgrade in the near future & those who are not aware/refused

Timeframe

30%

25%

20%

25%

0% 10% 20% 30% 40% 50% 60%

Less than 3 months

3 – 6 months

6 – 12 months

More than 12 months

Client Opportunities

N=163

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 14

Budget for Upgrades (Overall)

25%

35%

20%

20%

0% 10% 20% 30% 40% 50% 60%

Less than USD 100,000

USD 100,000 to USD 250,000

USD 250,000 to USD 500,000

More than USD 500,000

Budget Break-up of Budget

Licensing

Services

Hardware

• Over one third of respondents have a budget of between $100,000 - $250,000 for upgrades

• Though there is no unidirectional trend on spending patterns, XYZ users expect to realize scale economies in license spending only on very large overall outlays

N excludes respondents who do not have plans to upgrade in the near future & those who are not aware/refused

N=119

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 15

Future Implementation of IT Projects

90%

95%

90%

94%

90%

10%

10%

9%

5%

6%

-100%

-80% -60% -40% -20% 0% 20% 40% 60% 80% 100%

No Yes

Databases

Middleware

Content and Knowledge Management

Others

No Yes

Web Conferencing and United Messaging

N=427

• Approximately 5-10% of the XYZ users are considering implementation of IT projects in areas such as databases, middleware, content management and web-

conferencing

N excludes respondents who refused to answer or were not aware

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 16

Satisfaction with XYZ Installations

10%

15%

15%

17%

18%

19%

20%

50%

60%

15%

0% 10% 20% 30% 40% 50% 60% 70%

Factor 1

Factor 2

Factor 3

Factor 4

Factor 5

Factor 6

Factor 7

Factor 8

Factor 9

Overall

N=431

% of respondents who are ‘very dissatisfied’ and ‘dissatisfied’

• Majority of the XYZ users are dissatisfied with ‘parameter 1’ and ‘parameter 2’ for their XYZ applications

Mean Ratings

3.1

3.0

3.0

3.0

3.1

2.9

2.9

2.3

2.4

3.01=Very Dissatisfied

4=Very Satisfied

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 17

Satisfaction with XYZ Installations (by key markets)

N=431

% of respondents who are ‘very dissatisfied’ and ‘dissatisfied’

• Overall, dissatisfaction with respect to most factors such as ‘factor 1’ and ‘factor 2’ is highest in Greater China and is the least in India

• Greater China reports the greatest dissatisfaction for all parameters except ease of use (ANZ reports the least satisfaction) and industry specificity (Other APAC reports the least)

0%

10%

20%

30%

40%

50%

60%

70%

Factor 1 Factor 2 Factor 3 Factor 4 Factor 5 Factor 6 Factor 7 Factor 8 Factor 9 Overall

ANZ I ndia Greater China Other APAC

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 18

Likelihood of Continuing with XYZ

5%

10%

10%

70%

5%

0% 20% 40% 60% 80%

Very likely to continue

Likely to continue

Undecided

Not likely to continue

Not at all likely to continue

N=431

• While many feel that there are improvement areas for XYZ, almost 90% of them are likely to continue with XYZ citing high migration cost as one of the key reasons.

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 19

Likelihood of Continuing with XYZ (by Company Size)

• Clearly, smaller companies are feeling the pinch of costly upgrades and “lock-in” contracts

0

500

1000

1500

2000

2500

Very likely tocontinue

Likely tocontinue

Undecided Not likely tocontinue

Not at all likelyto continue

Avera

ge C

om

pan

y

Reven

ues in

Million

(U

SD

)

Likelihood of Continuing with XYZ N excludes respondents who refused to answer or were not aware

~ $2 bn

~ $2.5 bn

~ $900 mn

~ $500 mn

~ $ 100 mn

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 20

Priority Leads for the client

Yes47%

No53%

10%

20%

30%

40%

0% 20% 40% 60% 80%

Other APAC

Australia &New- Zealand

India

Greater China

N=53 N=25

• Among those who are undecided or are not likely to continue using XYZ, 47% said that they are likely to consider the client for their ERP applications and relevant upgrades

N excludes respondents who are likely to continue with XYZ

N excludes respondents who are not likely to consider client

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 21

Lead Matrix

Focus on pricing and “sell” ease of migration

Low-hanging fruit

Understand needs and position suitably

Likelihood of Continuing with XYZ

Low

High

Overa

ll S

ati

sfa

cti

on

wit

h

XY

Z

Low High

N = 5

N = 3 N = 32

Effective Marketing

Differentiate

N =15

N = 26

Undecided

• There is a strong case for pro-active communication of sales benefits

• Even if organizations are unhappy with XYZ, they may be undecided about their supplier choice as they perceive costs of migration (including implicit costs) to be too high

N = 350

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 22

Summary

XYZ Pain Points

This study validates the industry viewpoint that XYZ users face a series of difficult and costly upgrades. The pinch is more likely to be felt across relatively smaller XYZ customers, where scalability in terms of licensing costs is more difficult to achieve.

Majority of the XYZ users are dissatisfied with the ‘factor 1’ and ‘factor 2’ for their XYZ applications

Key performance-related areas of improvement for XYZ are

data base retrieval, reporting etc.

XYZ Usage

The most commonly used XYZ versions are version 1 and version 2

Modules like ‘BI’, ‘CRM, ‘HR’ and ‘SCM’ have not been implemented by majority of the XYZ users

© Evalueserve, 2006. All Rights Reserved - Privileged and ConfidentialSlide 23

Summary

Opportunities for the client

Key target segments:• Smaller XYZ customers• XYZ users who are concurrently using other databases and

applications• XYZ users who are actively planning to upgrade within the next 6

months or more

Direct Leads - 25 organizations actively mentioned client as an option they were willing to consider

Cross selling - 22% of respondents across the XYZ installed base are using client’s databases

Upgrades - 9% of respondents may not engage XYZ for upgrades and more than half of them have adequate timeframes

Key sales marketing messages:• Low cost migration alternatives that work• Flexible licensing terms• Ability to provide strong support during the migration phase

© Evalueserve, 2006. All Rights Reserved - Privileged and Confidential

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