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AberdeenGroup’s Cindy Jutras – on ROI trumping, and boundaries blurring

SSON: Cindy, you are responsible for driving research at Aberdeen. Explain your role to us, and also Aberdeen’s model, which is different to that of most research firms.

Cindy Jutras: As research fellow at Aberdeen, I drive not only my own research but also the evolution of our research methodologies. My coverage area is quite broad -- enterprise applications -- partly because of my extensive background but also since (in addition to the research I personally conduct) I play a leadership role in research oversight, i.e., developing our research methodology, assuring quality and consistency and overseeing training.

Aberdeen is quite different from other research firms. Aside from advisory services, we also provide benchmarking as well as lead-generation opportunities. The underlying basis for everything we do, however, is based on a benchmarking methodology, which is constant evolving. To date, much of our revenue comes from solution providers who sponsor or license our research. We believe the market needs research like ours, but that most companies don’t necessarily budget for this. So for the first 8 weeks after our benchmarks are released, the reports are offered to the end users free – in return, they agree to be contacted by the research sponsors.

We have recently developed a new product series that targets the end users making the buying decisions – Axis reports. These are a first for us, in that we’ve never done a vendor ranking or vendor comparison before. They are our answer to Forrester’s Wave or Gartner’s Magic Quadrant, but -- we believe -- based on more objective criteria. Axis refers to the x and y axes: the x axis registers "market readiness" and is based on answers to a questionnaire provided by the vendor, or publicly available data -- so it refers to the vendor’s ability to sell to and support their global customers; the y axis refers to their customers’ ability to achieve best in class status in our surveys. So these reports effectively provide a ranking of vendor efficacy.

SSON: As you’ve been running surveys with end-users, what are some of the findings you’ve come up with over the past 8 months? In particular: what are customers saying about the vendor market?

Cindy Jutras: We are seeing two major trends through our globalization studies. First, a much greater focus on the return on investment of a project -- particularly in large-scale enterprise applications like ERP -- as opposed to simply "total cost of ownership." Lots of vendors go to market claiming they offer the lowest total cost of ownership, and of course, they can do that because everyone defines TCO differently. End users are well aware of the disruptive effect of the full installation and implementation of these full solutions -- not to mention the large outlay of expenditure. What we are now finding is that these expenditures are not happening without an anticipated return on that investment, So the TCO message is no longer enough. End users are talking in terms of ROI. The market is maturing: quantifying and monetizing the benefits is rising in importance.

The second major trend we’ve noticed relates to ERP in combination with other enterprise applications, and it’s the blurring of the boundaries of ERP. It’s becoming hard to distinguish where ERP ends and other applications begin. The preference today is for more of a single-source solution. Customers want a fully-integrated solution, whether it’s sold as ERP modules or extensions. What’s important to the end user is that it is perceived to be all one system. It makes it easier for the end user to use and it reduces the ongoing cost of updates, upgrades, etc.

SSON: and what does this mean for the vendor community? How will it be impacted by end-users’ shifts in preferences?

CJ: ERP vendors, for example, need to expand their footprints. And there are really two ways in which this market grows: first, by acquiring market share, either one customer at a time -- a slow and sometimes painful process -- or by acquiring large customer bases through acquisition. But the market is already very consolidated, so growth via acquisition has slowed.

The other way is to expand the customer’s share of business, i.e., get the customer to spend more of their IT dollars with a particular vendor. Again: it’s easiest to do this by filling in solution gaps, whether by acquiring or developing extensions.

At this point, the major ERP vendors would love to think of themselves as a one-stop shop. But even an SAP or an Oracle cannot be everything to everyone. So that’s where they need to develop strong ecosystems and partnerships, to fill those gaps. Everyone is looking to acquire as much of the end user’s mindshare and enterprise application budget as they can.

Enterprise applications

30 plus years in Enterprise Applications Software – variety of roles including design, develop, product marketing/management, product strategy. Three and a half years with AberdeenGroup

Current Roles and Responsibilities
Vice President & Research Fellow at AberdeenGroup -- responsible for Aberdeen’s primary research that is driven by surveying hundreds of end users.

BA, Merrimack College, Mathematics and Physics
MAS, Boston University, Computer Science

Named Most Active ERP Analyst by The Knowledge Capital Group in January 2008

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