PeopleSoft renews commitment to customer satisfaction

At PeopleSoft Inc.’s recent user conference in New Orleans, presenters seemed to spend more time apologizing for drops in customer satisfaction than they did announcing new product strategies.

In his keynote speech, Dave Duffield, chairman and founder of PeopleSoft, promised customers the company would strive to regain any customer trust that may have been lost over the past year.

“It’s time to be open and honest with you. Last year was the most challenging in our industry, for PeopleSoft and for me personally,” he said.

“Market issues and the resulting growth slowdown caused PeopleSoft to make some changes to our business. To be sure, we should have handled some of those changes a lot better.”

Fresh leadership is one of the ways he said the company will improve. The most notable example is Craig Conway, PeopleSoft’s new president and COO, who made his first public speech at the conference.

According to Conway, PeopleSoft is going back to assigning each customer a single account executive who will field all of a customer’s problems and questions, after having dropped this practice last May.

“I can’t tell you now, in retrospect, how bad that decision seems to us,” Conway said, as the audience burst into applause.

“That wasn’t the part I was hoping to get applause on,” he added jokingly.

PeopleSoft offers many customer service offerings, he said, but has done “a terrible job” of communicating these benefits in the past.

“It’s important for companies to learn from their mistakes,” Conway said. “But I think it’s also important to quickly develop solutions, to sincerely apologize, and to move on.”

PeopleSoft plans to release a fully Web-enabled version of its enterprise resource planning (ERP) package by the middle of next year. PeopleSoft 8 will feature a new thin HTML client, designed to provide widespread access over low bandwidth networks for e-business applications, that can be linked to back-office ERP system via a Web server.

The Internet client software will initially become available late this year as part of an upgrade of PeopleSoft’s development tools. New analytical applications due out in December will also come with the browser client.

The company also plans to cut the number of minor upgrades that users of PeopleSoft’s ERP applications must make, as well as implement a formal beta-test program for new releases in order to catch more software bugs.

Cameron Dow, a research analyst with Toronto-based IDC (Canada) Ltd., said it was unusual that the keynote placed so much importance on customer service, instead of the products themselves.

“This may just be a reflection of Duffield himself and his sense of obligation to his customers, and the fact that they were slipping a bit on the customer service side,” he said.

“But it was confusing that they focused on that, rather than on the product release itself. Because now that all the ERP vendors are adopting an Internet architecture, that’s a key part of their strategy, so I would think that would be of more importance.”

Dow said for him, the two biggest announcements were that the company will be more involved on the implementation side and that it is getting into the application service provider (ASP) business.

“It was funny, because that was announced very quickly, and then sort of glossed over, partly because I don’t think they’ve defined their strategy yet.” Dow also speculated that PeopleSoft is likely to fill one conspicuous gap in its offerings by acquiring or partnering with a front-office software vendor.

John Torre, consultant for Montreal-based Litton Enterprise Solutions, said the fact PeopleSoft 8 is moving away from a strictly Windows environment is good for mid-sized companies, which comprise the majority of Canadian customers.

“Web-based ASPs are opening up a whole area of the middle market where, in the past, companies often didn’t have the resources to implement first-class ERP systems,” he said.

As a PeopleSoft systems integrator, he was also encouraged by the company’s renewed commitment to customer service, calling it “well needed.”

Katherine Jones, a senior market analyst, enterprise business applications with Aberdeen Group in Palo Alto, Calif., said the most significant part of the conference for her was the introduction of the new president. She said Conway seems like “an agent of change” for the company.

“[PeopleSoft] hasn’t had to change very much. Since their inception, they’ve been immensely popular doing the same-old, same-old. And all of a sudden, it didn’t work,” she said. “They were a company that really believed their own hype so much.”