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Transcript of FP Writing_Nguyen Minh Duc_MBM8_Viet-Bi v10.0 (1)
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SOLVAY-BRUSSELS SCHOOL
OF ECONOMICS AND MANAGEMENTNATIONAL ECONOMICS UNIVERSITY
VietnamBelgium Master Programs
MASTERS IN BUSINESS MANAGEMENT
FINAL PROJECT
KEY FACTORS INFLUENCING BUYING BEHAVIORS OF BANKING
AND FINANCIAL INSTITUTIONS TOWARDS HP ENTERPRISE
PRODUCTS AND SERVICES IN HA NOI
Prepared byNguyen Minh Duc (MBM8)Supervisor: Dr. Vu Huy Thong
Hanoi 2011
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ACKNOWLEDGEMENT
I would like to give my special thanks to Dr. Vu Huy Thong who has helped me
during the whole time of doing my final project. From making the final project
proposal to review theories and methodology, from how to collect data through
interview to data collection and analysis methods, from how to identify key
findings to making reasonable recommendations.
I would also like to record my indebtedness to all Professors under the Vietnam-Belgium Master Programs - Master in Business Management, whose valuable
lectures and professional experience have not only enriched my knowledge and
experience, but also changed my way of thinking. I would like to thank my class
from Group 3, MBM8 from whom I could learn a lot of experience in teamwork as
well as their precious skills and knowledge of the sector they are working.
Lastly, I would like to tender my thanks to all interviewees in my survey for their
real enthusiasm and patience granted to me. Without the detailed data obtained
from them, this final project could not be completed.
With high appreciation,
Nguyen M inh Duc
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EXECUTIVE SUMMARY
It is very important for companies to sell their products or services and to find new
customers. How can they implement their wishes, especially in the context of fierce
competition? HP Vietnam is not an exception. 40% of the HP Enterprise Business
group revenue comes from banking financial institution customer. FinancialServices has witnessed a annual growth rate of around 20% over the last five years.
The competition is severe with the participation of the giant player, IBM, Dell,
Cisco. Doing business in such fierce competition environment, how HP can gain
their expectation of annual growth rate of 25% in banking and financial sector?
In order to fulfill the expectation, HP Vietnam Manager should answer the initial
question: why a corporate buyer chooses a brand, and how they make decision. In
general, what are the major factors influencing the buying behaviors of corporate
buyers towards IT products? This fundamental question should be addressed under
the circumstance that HP Vietnam has not taken any study on the customers in
banking and financial sector so far.
In order to find the results for the research question, the author conducted in-depth
interviews with 19 respondents including HP Vietnam Sales Director, two HP sales
staffs, 16 corporate buyers. The aim of the survey is to discover the participants in
business buying process; to find out major influences on business buying decisions;
to understand how these influencing factors affect a participant in the decision-
making process; and finally to understand the stages in the buying process and
elements affecting this process. The interviews were done based on the question
guidelines, which used to find common themes as well as differences between
respondents point of views.
The research results showed the role of each participant in the buying center in the
decision-making process towards HP enterprise products and services. Buying
center often includes IT directors, functional managers, such as server manager,
storage manager, networking and security manager; application manager and
solution architect. Buying center is formed due to government policies or in order
to reduce risks associated with investment and purchasing decisions. One of the key
findings is of major criteria influencing cooperate buying decisions, including
quality of products, costs, the brand name, relationship, and services, in which the
relationship plays a vital role in the decision-making process. The findings also
indicated eight steps in the purchasing process from the problem recognition step to
the final step. Once again, besides other factors, the relationship shows its roles in
the purchasing process as it helps shorten the time of the process and increase the
successful rate of the offer.
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Based on those findings, the author provided recommendations to build a multi
level customer approach, focusing on building relationships with those involved in
the buying center and affect the decision to select IT products and solutions from
HP. Another recommendation on sales team management aims to reach and
strengthen its relations with the buying center participants in many different levels,which is believed to bring efficiency in FSI segment. In addition, the author give
recommendations on communication and marketing plan for the products of HP
and solutions for banking finance institutions, focus on three main groups
including direct sales, direct marketing and mass marketing.
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TABLE OF CONTENTS
ACKNOWLEDGEMENT ............................................................................................. 2
EXECUTIVE SUMMARY ............................................................................................ 3
TABLE OF CONTENTS ............................................................................................... 5
LIST OF FIGURES ........................................................................................................ 6
LIST OF ABBREVIATION .......................................................................................... 7
CHAPTER IINTRODUCTION .............................................................................. 10
I.1 INTERNET BANKING AND THE ROLE OF IT IN BUSINESS ACTIVITIES OF BANKS AND FINANCIAL
INSTITUTIONS ................................................................................................................................. 10I.2 INTRODUCTION ABOUT THE CUSTOMER GROUP OF BANKING AND FINANCIAL INSTITUTIONS .... 13I.3 INTRODUCTION ABOUT HPVIETNAM ................................................................................... 15
CHAPTER IIPROBLEM ANALYSIS ................................................................... 18
II.1 HPS ACTIVITIES IN BANKING FINANCIAL CUSTOMER SEGMENT ........................................... 18II.2 HPVIETNAM UNDER PRESSURE ON GROWING REVENUE IN THE BANKING AND FINANCIAL
INSTITUTIONS SECTOR .................................................................................................................... 19II.3 CURRENT DIFFICULTIES IN BUSINESS .................................................................................. 20
CHAPTER IIIMETHODOLOGY METHOD ....................................................... 22
II.1 THEORETICAL FRAMEWORK ON CORPORATE BUYERS BEHAVIOR.......................................... 22II.2 DATA SOURCE................................................................................................................... 24III.2 IN-DEPTH INTERVIEWS ....................................................................................................... 25III.3 DATA ANALYSIS................................................................................................................. 27
CHAPTER IVRESEARCH FINDINGS................................................................. 28
IV.1 KEY FINDINGS ON BUYING CENTER.................................................................................... 28IV.2 KEY FACTORS INFLUENCING BUYING BEHAVIOR OF CORPORATE BUYERS IN BANKING ANDFINANCIAL SECTOR IN VIETNAM ....................................................................................................... 34IV.3CRITERIA ON EVALUATION OF SUPPLIERS, PRODUCTS AND SOLUTIONS ....................................... 38IV.4ADVANTAGES AND LIMITATIONS OF THE SURVEY........................................................................ 40
CHAPTER VRECOMMENDATIONS AND CONCLUSIONS ........................... 42
V.1 RECOMMENDATIONS.......................................................................................................... 42V.2CONCLUSION ........................................................................................................................... 47
REFERENCES ............................................................................................................. 48
APPENDIXES ............................................................................................................... 49
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LIST OF FIGURES
Figure 1: Banks and financial institution with multi-channel IT systems ............... 11
Figure 2: IT Spending by Asia Pacific banks and Insurers (2010) ......................... 12
Figure 3: IT Spending by Asia-Pacific Banks ......................................................... 13
Figure 4: IT Spending By Asia-Pacific Insurers ..................................................... 14
Figure 5: IT Spending in Vietnam ........................................................................... 15
Figure 6: Revenue from FSI compared with the total revenue of the company ...... 20
Figure 7: Key factors influencing customer behaviors ........................................... 23
Figure 8: Steps in the buying process ...................................................................... 24
Figure 9: steps in buying IT project ........................................................................ 29
Figure 10: Procurement methods for IT projects ................................................... 31
Figure 11: Frequency of participating in buying center ......................................... 35
Figure 12: Vendors in Vietnam FSI Sector for IT infrastructure project................ 37
Figure 13: Criteria on IT vendors (suppliers) evaluation ....................................... 39
Figure 14: Direct marketing to the buying center ................................................... 43
Figure 15: Communication plan .............................................................................. 44
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LIST OF ABBREVIATION
IT Information Technology
FSI Financial Services Industry
PC Personal Computer
PSG Personal System Group
IPG Imaging and Printing Group
EB Enterprise Business
ESSN Enterprise Storage, Servers and Networking
SI System Integrators
RFP Requests For Proposal
CAPEX Capital Expenditure
OPEX Operation Expenditure
ROI Return on Investment
CEO Chief Executive Officer
CTO Chief Technology Officer
CIO Chief Information Officer
CFO Chief Financial Officer
HP Hewlett-Packard
IBM International Business Machine
Sun Sun MicroSystem
NetApp Network Appliance
CA Computer Association
BMC BMC Software company
HDS Hitachi Data System
FPT FPT Corporation
HPT HPT Company
HiPT HiPT Company
CMC CMC Corporation
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Introduction
In the era of global economic integration and ever fiercer competition among
domestic banking and financial institutions as well as foreign-related institutions in
Vietnam, the decision making of banks and financial institutions to purchase
information technology (IT) systems, which serve the activities of production,
business and enterprise management, has to take into consideration numerous
factors, originating from not only internal needs of enterprises themselves, but also
the business setting, socio-economic environment in which enterprises are
operating in general. Changes in the business setting and human resources of banks,
financial institutions will affect decisions of purchasing IT systems products and
services that Hewlett-Packard Vietnam Ltd. (HP Vietnam) has been providing to
the Vietnams market almost throughout the last 20 years.
Studying the manner of implementing an IT project as well as factors shaping
decisions of customers during their selection and purchase of IT products and
services plays an important role in developing HP Vietnams business and
marketing plans for the customer group of banking financial institutions.
Therefore, it was chosen as the theme of this study, so as to put forward
recommendations for HP Vietnam to make full use of currently available resources
in achieving its growth targets in the following years, especially within the
customer group of bankingfinancial institutions.
The study aims to answer the following questions:
- How are IT projects in banks and financial institutions implemented, what
are the roles of individuals in buying centers and their influence on the
decision making in IT projects?
- What are major factors affecting each participants in the buying centers
during their making decisions of selecting and purchasing IT products and
services in the target group of the study?- What are recommendations for the business and marketing plans of HP
Vietnam toward the customer group of bankingfinancial institutions in the
nowadays-changing business setting?
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To conduct this study, the author used business-to-business marketing theories
about roles of individuals in the buying centers, factors influencing the purchase
decision in institutions. Data were collected from IT reports of both domestic and
international banking and financial institutions, especially primary data related to
the final project was obtained by the author through direct and in-depth interviewswith corporate customers participating in buying center of banks, financial
institutions and leaders as well as staff of HP Vietnam.
The final project is structured of five chapters. Chapter 1 provides a general
introduction about HP Vietnam, its fields of business and the market segment of
customers being banking financial institutions in Hanoi. Chapter 2 concentrates
on the analysis of challenges that HP Vietnam is facing in its customer group of
bankingfinancial institutions, thus highlighting the necessity of understanding the
manner and factors influencing the decision making of purchasing IT projects,which in turn affects business performance of HP Vietnam. Then, Chapter 3
summarizes theories of business-to-business marketing used as a foundation for the
study, as well as presents methods of data collection for the study. Chapter 4 briefly
describes key findings of the study, including the organization and operation of
buying centers, factors shaping actions of purchasing IT projects of customers of
banking financial institutions. Chapter 5 proposes recommendations for HP
Vietnam to develop its customer relationship model, plans of communication,
marketing and organizing sales teams for the segment of banking financial
institutions in Vietnam. The parts of Conclusion and References will be followed
by the Appendix, which includes questions used in conducted interviews.
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CHAPTER I INTRODUCTION
This Chapter provides a brief introduction of Hewlett-Packard Vietnam Ltd., the
roles of IT systems in activities of the customer group of banks and financial
institutions in Hanoi HPs important customers, and the market of these
customers in Vietnam and the Asia-Pacific region.
I.1 Internet banking and the role of IT in business activities of banksand financial institutions
Over the last few years, IT has played a role of prime importance in activities of
banking and financial institutions. The application of IT has allowed these
institutions to provide new banking services with advanced technologies and the
capability of online information processing; services of internet banking have
offered online payment and inquiry services to customers having payment relations
with banks.
New banking services create a payment method or handle banking processes
through information and communication services such as Internet (Internet banking
services), telephones (phone banking services), messages (SMS banking services),
etc. New banking services are often divided into two groups for individual
customers and corporate customers. Internet banking services are bringing about
the convenience that traditional services cannot offer. For instance, thanks to
Internet banking services, customers are now able to use Internet to enjoy online
such services as: managing information about accounts in banks, printing
transaction lists of accounts, loans, transfers among accounts in different banks,
paying credit card debts, bills of goods and services like electricity, water,
telephone,
For the operation and management of enterprises, the role of IT is also significant.
All activities of either branches or headquarters of banks, from daily business
performance to the reporting and decision making of leaders, need the support of IT
systems to facilitate the reduction of operation cost, the increase of customers and
revenue based on new banking services. The connection among banks and credit
institutions helps shorten payment time, minimize costs incurred by enterprises as
well as the cost of production and business for customers using capital and services
of banks and financial institutions. For example: The model of applying core
banking system presently deployed in banks allows them to perform all
professional processes in a concentrated and automatic manner, offers Internet
banking services to customers through advanced connectivity facilities such as
Internet banking, phone banking, SMS banking,.. and at the same time provides
tools of reporting and supporting decision making for managing levels.
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Figure 1: Banks and financial institution with multi -channel I T systems
(Source: HP Vietnam internal report)
In order to provide the above-mentioned Internet banking services, each bank needs
to equip an IT system serving professional application software. Such equipment is
the investment in and spending for IT of banks. These IT systems comprise
hardware such as server system, storage system, systems of connectivity and
information security; system software and software of operation management,
exploitation of the above hardware systems; together with services of consultancy,
support and implementation of these IT systems.
IT spending of an enterprise covers the spending for IT within the enterprise
(Internal IT Spending) and that come from outside the enterprise (External IT
Spending). In particular,
- Internal IT spending includes the costs of management, development,
operation, exploitation of and support for the IT system of the enterprise, not
excluding personnel cost for IT activities.
branches
MyBankBook
mobile
Mul
social networ
web marketpl
retail
touch-points
ATMs &
Kiosks
Customer service
representatives
Virtual
TellerVirtual
Advisors
Voice/IVR
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- External IT spending includes the spending for hardware, software and
relevant technology services, which is provided from outside the enterprise.
These spending might be for activities of operating and managing data
centers, hardware and software for the development of IT applications, costs
of software copyright, of technology services for consulting experts.Detailed spending items are as follows:
o Spending for IT hardware: including costs related to the purchase or
renting of hardware such as servers, network equipment and
associated auxiliary equipment, costs related to server and network
operating systems.
o Spending for IT software: including costs of purchase or copyright of
software related to solution packages of the third enterprise,
excluding costs of installation, deployment or correction during
software deployment.
o Spending for services: including costs related to IT services
purchased from external providers, including costs of consultancy,
system installation, intensive training.
As stated in the report of IT Spending in Financial Services - A Global Perspective,
January 2011 by Celent1, IT spending in the customer group of banks and financial
institutions in the Asia Pacific region in 2010 reached 52.9 billion USD in the
banking sector, 23.45 billion USD in the insurance sector and 8.2 billion USD in
that of securities companies and investment funds.
In terms of spending ratio for hardware, software and services, discrepancies
existed among the group of banks, the group of insurance companies and the group
of securities companies and investment funds. For example, for the banking sector,
Internal IT Spending accounted for 29.68%, spending for hardware accounted for
49.15%, while that for external software and external services only made up
11.34% and 9.83% respectively. Meanwhile, for the customer group of insurers,
Internal IT Spending made up 34.89%, spending for hardware 34.89%, whilespending for external software and external services represented only 14.47% and
15.74% respectively, as shown in the following figure:
Figure 2: I T Spending by Asia Pacif ic banks and I nsurers (2010)
1Jacob Jegher,IT Spending in Financial Services - A Global Perspective, January 2011
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(Source: Celent -IT Spending in Financial Services - A Global Perspective, January 2011)
The main purposes of increasing spending for IT in banks and institutions are to
enhance the competitiveness of banks, promote IT application to optimize banking
activities, develop modern payment applications and retail banking services,
manage risks and control banking technology systems.
Requirements might be summarized as follows:
- Services and payment channels for individual customers and corporate
customers are expanded to attract more customers, increase revenue and
extend network;
- Competition among joint stock commercial banks, the State-owned banks
and foreign-related banks;
- IT application becomes a tool, creating competitive advantages for banksand credit institutions;
- IT centers gain more importance in the general operation of banks, helping
to increase customers, increase revenue, reduce operation costs, supporting
activities of reporting and decision making of leaders;
I.2 Introduction about the customer group of banking and financialinstitutions
According to the report by Celent2
in 2011 on the IT market of the banking
finance sector in the Asia Pacific region and Vietnam, after the global economiccrisis, banks and financial institutions continue to boost investment in IT to expand
business activities, strengthen the network and improve the operation effectiveness
of enterprises. The annual IT spending of this sector will increase by 5.6% to
6%/year in the following years up to 2013. Moreover, IT spending of the banking
finance sector in the Asia Pacific region still mainly focuses on hardware and
software, that for services remains low, accounting for only approximately 10% of
the total IT spending.
Figure 3: I T Spending by Asia-Pacif ic Banks
2Jacob Jegher,IT Spending in Financial Services - A Global Perspective, January 2011
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(Source: Celent -IT Spending in Financial Services - A Global Perspective, January 2011)
For the group of banks, the majority of IT spending goes for the equipment of
hardware, taking up approximately 50% of the total IT spending of banks, and
tends to increase, while the spending for external software and services makes up
only 10%. Such ratio is different from that in banks in the North American region,
where the spending for hardware accounts for only 15% and tends to decrease
gradually, while that for technology services represents up to 30% and for software
20%. So, the IT market of hardware, software and technology services for banks in
the Asia Pacific region remains potential and promising, reaching 39.9 billion
USD and accounting for 71% of the total IT spending of banks. This is the
opportunity for such providers of HP IT products, solutions and services in this
region.
Figure 4: I T Spending By Asia-Pacif ic I nsurers
(Source: Celent -IT Spending in Financial Services - A Global Perspective, January 2011)
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Similar to the above tendency, the majority of IT spending of insurers in the Asia
Pacific region is channeled to the equipment of hardware, accounting for
approximately 35% of their total IT spending, while that for external software and
services takes up just 16% and 15% respectively of the total IT spending. As a
results, there exist numerous opportunities for HP in the customer group of
insurance companies with the ratio of spending for hardware, software and
technology services reaching up to 75% of their total IT spending in the Asia
Pacific region, including the Vietnams market.
Considering Vietnam only, according to IDCs report on Vietnam IT market from
2009 to 2013, the forecast of spending for information and communication
technologies for the period of 2011 - 2013 shows further steady rise, of which the
spending for hardware takes up more than 80%, aiming to develop the
infrastructure of information and communication technologies, modernize and
apply IT in enterprises, especially those operating in the bankingfinance sector.
Figure 5: I T Spending in Vietnam
(Source: IDC Economic Impact Study, 2010 )
I.3 Introduction about HP Vietnam
HP is a leading global provider of products, technologies, software, solutions andservices to individual consumers, small- and medium-sized businesses (SMBs)
and large enterprises, including customers in the government, health and education
sectors. HPs offerings span:
multi-vendor customer services, including infrastructure technology and
business process outsourcing, technology support and maintenance,
application development and support services and consulting and integration
services;
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enterprise information technology infrastructure, including enterprise
storage and server technology, networking products and resources, and
software that optimizes business technology investments;
personal computing and other access devices; and imaging and printing-
related products and services.
HP was incorporated in 1947 under the laws of the State of California as the
successor to a partnership founded in 1939 by William R. Hewlett and David
Packard. Effective in May 1998, HP was changed its state of incorporation from
California to Delaware.
In Vietnam, HP is organized into 3 main business segments: HP Enterprise
Business (EB) group which includes HP Services, Enterprise Storage, Servers and
Networking (ESSN), HP Software; the Personal Systems Group (PSG); the
Imaging and Printing Group (IPG).
HP Enterprise Business: The HP Enterprise Business provides servers, storage,
software and information technology services that enable enterprise and midmarket
business customers to better manage their current IT environments and transform
IT into a business enabler. HP Enterprise Business products and services help
accelerate growth, minimize risk and reduce costs to optimize the business value of
customers IT investments. Companies around the globe leverage HPs
infrastructure solutions to deploy next generation data centers and address businesschallenges ranging from compliance to business continuity. The HP Enterprise
Businesss modular IT systems and services are primarily standards- based and
feature differentiated technologies in areas including power and cooling, unified
management, security, virtualization and automation.
Personal Systems Group: PSG is the leading provider of personal computers
(PCs) in the world based on unit volume shipped and annual revenue. PSG
provides commercial PCs, consumer PCs, workstations, handheld computing
devices, calculators and other related accessories, software and services for thecommercial and consumer markets. Like the broader PC market, PSG continues to
experience a shift toward mobile products such as notebooks. Both commercial and
consumer PCs are based predominately on the Windows operating system and use
Intel and AMD processors.
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Imaging and Printing Group: IPG is the leading imaging and printing systems
provider in the world for consumer and commercial printer hardware, printing
supplies, printing media and scanning devices. IPG is also focused on imaging and
printing solutions in the commercial markets, from managed print services
solutions to addressing new growth opportunities in commercial printing andcapturing high-value pages in areas such as industrial applications, outdoor signage
and the graphic arts business.
Due to time and financial limits, this paper only concentrates on studying issues
related to banking and financial institution customers and the group of products,
services and solutions for enterprise business. This is one of the three major groups
of products and services of global HP, including server systems, storage systems,
network and security systems, solutions and software for enterprises, IT services.
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CHAPTER II PROBLEM ANALYSIS
In this chapter, the author analyses challenges that HP has been facing in the
bankingfinance market, pressures in terms of revenue and market share, as well
as difficulties during the operation process over the last years in this sector of
customers, so as to prove the importance of deeply understanding factors affecting
customers decision of purchasing IT systems in the development of appropriatebusiness and marketing plans for the target customer group to obtain better
achievements.
II.1 HPs activities in banking financial customer segment
Banking finance is one of the important markets of HP in Vietnam as well as
internationally. With more than 35 years of experience and the presence in more
than 200 worlds leading banks, over 130 major stock exchanges and commodity
exchanges of the world, and over 50 internationally famous insurance companies,HP possesses rich experience in the bankingfinance sector all over the world.
In Vietnam, HP has been providing solutions to and supporting more than 50% of
State-owned and joint stock commercial banks, financial institutions, stock
exchanges and commodity exchanges. HP offers not only products and
comprehensive solutions for IT systems of banks and financial institutions, but also
consulting services to help enterprises reduce the operation cost and improve their
competitive advantages.
The customer group of banking and financial institutions contributes a remarkable
part of revenue to the business operation of HP in Vietnam, accounting for more
than 40% of the annual revenue. On the other hand, with the economic booming of
Vietnam, especially the development of banking and financial services in the recent
years, this customer group has been playing an ever more important role in HPs
business operation in Vietnam.
As shown in report ofStrategy for IT development of Vietnam banking from 2011
to 2015,March 2011 the State Bank of Vietnam, over the last decade in Vietnam,
banks and financial institutions have been investing in IT systems to modernize
their banking, insurance and financial systems, provide customers with services of
diverse utilities, contributing significantly to the rapid development of Vietnams
banking finance sector. Main points of the investment into IT systems by this
customer group might be presented briefly as follows:
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- In the group of projects in banks, the Core banking system is the most
important IT system and was prioritized to implement first in the bank. From
2002 to 2010, the core banking systems have being strongly implemented,
with 22 banks in Ha Noi3
having deployed the core banking system. All
these core banking project were funded by either World Bank for the first
and second phases of the project of modernizing banks and the payment
system or capital sources of commercial banks. Besides the core banking
system, other systems have been deploying in banks, such as Internet
banking, phone banking, SMS banking, Business Intelligent, Customer
Relationship Management and Risk Management systems.
- In the group of securities companies/stock exchanges, major system serving
online transactions with two exchanges have been deployed. IT project in
these customers were booming in 2006 2008, but halting and reducing in
the short term from 2009 up to now. They were heavily affected by the
global and Vietnamese economic downturn, resulting in lower investment in
IT in the short term and mid-term.
- The group of projects in financial/insurance companies with IT systems
serving professional processes of insurance contract management,
compensation payment have been deploying.
So, major systems in the banking finance sector have been investing strongly by
various funding sources. In the orientation for the future, these customers willcontinue their investment to upgrade systems, replace with new major ones;
moreover, they will invest in systems facilitating the management, decision making
and optimizing the operation of enterprises in this field. This is the chance for HP
Vietnam and providers of IT products and solutions, which simultaneously means
more competition pressures among these companies.
II.2 HP Vietnam under pressure on growing revenue in the bankingand financial institutions sector
Another challenge existing within HP Vietnam is the revenue pressure in thecustomer group of banking and financial institutions, which forces HP to maintain
its high growth rate in this customer group. Within the last five years, the revenue
of HP Vietnam in this customer group has risen sharply by 20 25% per year,
much faster than the overall growth rate of the whole market. The success or failure
in this group of customers will affect greatly the general operation of the company;
therefore, this is an important and decisive customer group that HP Vietnam needs
to pay attention to study and invest to ensure a sustainable development of the
company in the coming time.
3ITDBTechnology report, Some Orientations of IT Development in Vietnam Banking, 3 - 2011
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The below diagram describes the ever more necessary role of the customer group of
banking and financial institutions in the business operation of HP Vietnam.
Figure 6: Revenue fr om FSI compared with the total r evenue of the company
(Source: HP Vietnam internal report 2011)
Consequently, the revenue pressure in the customer group of banking and financial
institutions requires HP to acquire understanding about IT system purchase
behaviors of these customers, to increase its business and marketing effectiveness,
preserve its competitive advantages, and develop as well as expand the market of
this crucial customer group.
II.3 Current difficulties in business
With IT projects which have been invested and purchased by all customers in the
banking finance sector, this is a huge market being eyed by many companies,
leading to increasingly harsh competition in this customer group. The business
environment in the sector of banking and finance suffers from numerous impacts of
the macro economy, regulatory policies of the State Bank, impacts of banks
customers,... bringing about changes in the manner, decision of selecting and using
IT systems in banks. HPs difficulties in the customer group of banking and
financial institutions are summarized as follows:
- The demand of purchasing hardware systems, system software and servicesof HP Vietnam arises together with the demand of using application
software solutions serving professional processes of banks and financial
companies. IT infrastructure depends on requirements of application
software solutions and cooperation with application software providers
(ISVs) plays an important role in approaching and introducing solutions to
customers
-
10.00
20.00
30.00
40.00
50.00
2007 2008 2009 2010 2011
(Est.)
FSI quota
Country Aspire
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- Requirements of an IT project have been increasing due to the size of
solution, the level of complexity of the project, the pressure of
implementation and completion timeline of the project and increasingly high
requirements of service quality. Customers awareness about the application
of high-tech services, professional consulting services is not high, very few
consulting projects are available and the spending for these services has not
been properly appreciated.
- Products and providers evaluating methods, as well as decision making
process for purchasing IT projects of banks/financial institutions are also
important factors deciding whether customers will select HPs products and
services or not. Requirements of bidding procedures, provider evaluation,
selection of products and solutions, and contract signing might slow down
the progress of the whole project. The number of individuals participating in
the decision making process increases more and more due to the scale of the
project and the complexity of the project, which will create more difficulties
in marketing IT products and solutions to appropriate objects.
- Competition among providers of IT solutions in the Vietnamese market is
ever growing, which is directly proportional to the increase in the
competition level, especially in pricing war.
Proposed issues: For HP to maintain its market share and meet its target of
revenue growth rate in the customer group of banking and financial institutions, as
well as to overcome competition challenges in this customer group, it is crucial to
study and find out which factors influence the decision making of banks and
financial institutions in their purchase and application of IT products and services.
Based on these findings, suitable business and marketing plans will be developed,
taking into account updated requirements of the customer group of banking and
financial institutions in Hanoi.
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CHAPTER III METHODOLOGY METHOD
In this chapter, the author will describe the method of data collection and analysis
along with theories that is used for researching to clarify the hypotheses. These
theories include business-to-business marketing on roles in buying center and key
factors influencing buying behaviors of corporate buyers.
II.1 Theoretical framework on corporate buyers behavior
II.1.1 Theory on the buying center
When a person makes a purchase decision alone for an organization, the decision is
said to be autonomous. When more than one person is involved, the group of
participants in the purchasing decision process is called the buying center. Role
theory helps us to understand how those participants interact because it defines the
roles people take when involved in purchases - IT procurement projects.
The buying center might include initiators, controllers, users, influencers,
purchasing agent, gatekeepers.4
- Initiatorstarts the purchase process by recognizing the need; at the other end
of the process is the decision maker, the person who makes the final
decision.
- Controllercontrols or sets the budget for the purchase
- Purchasing agentis the person who actually makes the purchase.
- Influencers are those individuals who seek to affect the decision makers
final decision through recommendations of which vendors to include or
which products are best suited to solve the organizations needs. Influencers
can also affect the evaluation of the organizations needs.
- Sometimes users are part of the buying center and try to influence the
decision; sometimes, other influencers will represent the users perspective.
- Gatekeepers control information into and out of the buying group or
between members of the group. Sometimes gatekeepers can actively
influence a decision by determining what information is made available to
the decision maker.
This theory helps the author identify who participates in the business buying
process towards HP enterprise products and services.
II.1.2 Buying determinants theory
4F. Robert Dwyer, John F. Tanner, Jr, 2002. Business MarketingConnecting Strategy, Relationship
and Learning. McGraw-Hill Higher Education, page 107)
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According to F. Robert Dwyer and John F. Tanner5, the buying determinants
theory describes behavior as due to the combined effects of four factors:
environmental factors such as government regulations and technology; market
factors, such as size and number of competitors; organizational factors, including
company size, corporate culture, and policies; and individual factors, like age,
experience, and education of any individual person involved in the decision.
Figure 7: Key factors influencing customer behaviors
(Source: Business MarketingConnecting Strategy, Relationship and Learning. McGraw-Hill Higher Education, 2002)
Individual factors
Individual factors are demographic and psychographic factors (psychological
factors) that influence an individuals buying behavior. These factors can includeage, education, and title or organizational level of the buyer, or they can be
psychological factors such as the propensity to take risks. One of the individual
factors that has been found to influence buyer behavior is experience, or years in
purchasing. Experience reduces risk because uncertainty can be more accurately
evaluated, and it increases the probability that the individual will buy alone, rather
than creating a buying center.
Organizational factors
Organizational factorsare characteristics of the organization that influence buying
behavior. They include the size of the company, profitability, corporate culture,
distribution of power, organizational policy, and other factors. Sometimes, the
factor of the type of organization would have on influence on buying process.
Different decisions were made by a private organization and state-own organization
in the same circumstance.
Market factors
5F. Robert Dwyer, John F. Tanner, Jr, 2002. Business MarketingConnecting Strategy, Relationship
and Learning. McGraw-Hill Higher Education, page 115)
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Market factors are the characteristics of the market that influence buyer behavior.
Market factors include the number and relative size of competitors and the number
and relative size of customers in a particular market. The number of competitors
can be affected by the availability of substitutes. With so many substitutes in the
market, competition can become quite heated. The number of customers is also an
important market factor. Relative size of buyers can also make an impact on buying
behavior.
Environmental factors
Environmental factors have had a great impact on how decisions are made.
Environmental factors are those characteristics of the world beyond the market
level, and include the economy, technology, political factors, and social factors. As
an economic example, many companies downsized due to economic pressures of
global competition and slowing economies.
II.1.3 Steps in the buying process
In corporate buying, a series of steps (or phases) would be taken when making a
decision, beginning with problem recognition and then search for alternatives,
evaluate the alternatives, and select a solution, which is then implemented and
evaluated.
Figure 8: Steps in the buying process
Source: F. Robert Dwyer, John F. Tanner, Jr, 2002. Business Marketing Connecting
Strategy, Relationship and Learning. McGraw-Hill Higher Education. Page 73
II.2 Data source
The study based on two kinds of data: secondary data and primary data.
II.2.1 Secondary data
Step 2: Definition of the
product/services-type needed
Step 1: Recognition of a
need
Step 3: Development of
detailed specifications
Step 6: Evaluation of
proposals and selection of a
Step 7: Selection of a orderplacement
Step 8:Evaluation of
product performance
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The secondary data was to equip the author on the theoretical background for the
study and to collect information on the market as well as players in that market.
The data on Information Technology (IT) in banking and financial sector in Asia
Pacific and Vietnam comes from the reports which were published IDC Financial
Insights, Celent or Hewlett-Packard Company. Some data on IT projects of banks
and financial institutions comes from reports of Informatics Technology
Department of the Bank - ITDB (State Bank of Vietnam), reports of Banking
Vietnam events or annual reports of Vietnam Joint Stock Banks.
II.2.2 Primary data
The main data of the study was collected from primary source via in-depth face
to-face interviews. The interviews were taken with 19 respondents including one
member in HP Vietnam sales managers, two account managers, and sixteen
corporate buyers of HP products and services. Notes were taken during theinterviews. The author built the interview guidelines for each group of respondents.
The interview guidelines were prepared in a consistency with the objectives of the
study. The in-depth interviews enabled the author deeply understand the buying
behaviors of corporate buyers.
III.2 In-depth interviews
I nterviews with Sales Di rectors of HP Vietnam
The interview was taken with Sales director of HP Vietnam in his office in about
one and a half hour. The Sales Director, Mr. Pham Hong Phong, who is directly
responsible for managing HP enterprise products and services in Vietnam, was
invited to discuss.
In the interview, he was asked about HP organizational structure, the business
model applied so far, and his self-assessment of the strength and weakness of HP
EB group. The author also wanted to know his knowledge on the customers buying
behaviors and notably factors having impacts on their decision-making process.
The list of question guidelines is in Appendix 1.
I nterviews with sales staffs
Two persons of the sales staffs were invited to an individual face-to-face interview,
which last about 45 minutes in HP office. The first person is the HP FSI sales
manager and has a six-year-experience in this sector and the other has worked for
three years at HP. They are the people directly contacting with customers, receiving
feedbacks and dealing with complaints. Their insight views are valuable to the
results of the research.
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The author asked for their opinions on the participants in a decision-making
process. They were also requested to give their views on the factors that could
affect the buying decisions and to evaluate the way these factors could have effect
on the buying center. They were also invited to give recommendations for a better
performance of the sales group, especially of the sales force. The Appendix 2 is alist of question guidelines used in the interview with them.
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I nterviews with instituti onal buyers
Because of wide range of IT products portfolio, almost banks and financial
institutions in Vietnam have bought at least one or more kind of products from HP,
such as computers, printing products or servers and storage system. The aim was to
see the difference between their views in terms of different products and to be ableto discuss more closely on their comments on HP products and services. Sixteen
corporate buyers of HP products and services were invited to interview. The
interviews were taken in their office in about 30 to 40 minutes, which was guided
by the questions stated in Appendix 3 herein.
During the interviews, the author took notes their opinions on the buying process in
their companies towards HP products, the reasons of using HP products and
services, factors having effects on their decisions, their comments on HP products
and recommendations to improve the services.
III.3 Data analysis
The interviews were taken notes, processed and analyzed with a constant view with
the research objectives. To find out the differences or common themes, the author
compared opinions of different groups by using similar questions so that the author
can study on that differences or common themes and to give out the reasons. From
the collected data and information, the author summarized and concluded into the
key findings presented in the next Chapter.
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CHAPTER IV RESEARCH FINDINGS
In this chapter, the author presents the research findings drawn from data
collected. The findings focused on buying center, including how it is formed and
works; who are participants and their roles in buying center, and the major factors
influencing buying behaviors of corporate buyers.
IV.1 Key findings on Buying Center
IV.1.1 Steps in buying process of IT projects
The interviews results have revealed that finance and banking groups have
established fundamental IT projects, which have clear directions and follow
policies closely. However, the rigorous and detail level of these policies are
depended on: a) type of customers: State-owned banks, joint stock commercial
banks, securities companies, insurance companies; b) size of customers or the
nature of the projects.
Answering the question of Which methods has your company used to buy IT
projects? And follows by which steps? most interviewers replied with series of steps
which the IT projects has been followed.These main steps are:
- Steps 1: IT projects are triggered by needs from either internal or external
organization, such as from business or management requirements within
organization itself or regulations of the government bodies, such as the Statebank of Vietnam for banks and State Securities Commission of Vietnam for
securities companies.
- Steps 2: the requirements in details are developed based on the suggestions
and opinions of professional and business groups as well as the other
organizations departments. In some cases, consultative service was used.
- Steps 3: To meet the business requirements, IT department will create
technical requirements of the IT system. These requirements play an
important role in choosing products during the proposal acquisition via
bidding or competitive offering.
- Step 4: If the project is an annual purchase, which has been done annually,
so that the suppliers are already in the short list and then search for qualified
suppliers is not necessary. If not, the project management office has to look
for suppliers who meet their requirements. Based on suppliers offering, the
management will have suppliers information, and from that, they will
evaluate and make a short list of suppliers.
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- Step 5: The requests for proposal (RFP) are sent to selected suppliers for
solutions acquisition. The bidding procedures have to follow the government
policies or particular policies of the sponsors likes the World Bank, Asian
Development Bank.
- Step 6 & 7: Evaluating and choosing supplier processes require many peoplefrom different departments of the organization to take part in. The evaluation
includes the assessment of technical and technology of the products, cost,
proposed solutions and others.
- Steps 8: Testing and commissioning is to provide the conclusions. These
conclusions are made based on previous requirements and will influence to
purchasing IT system decision of the organizations.
The steps in buying IT project are shown in the figure below:
Figure 9: steps in buying I T project
(Source: Authors survey result - 3/2011)
According to research results, the buying process in state-own companies take longtime, usually from 12-18 months, because there are rigorous, requires many stages
and people to participate. Therefore, HPs sales team has to identify these
characteristics to create business plans for this kind of customers with the
prediction that the sale cycles will be longer and need more effort to close the
projects. Otherwise, with the other companies, the process takes average 9-12
months. It is because there are less stages and the final decision are made faster and
related to the actual demand of the organization. Hence, in this kind of customers,
the sales cycle is shorter.
Step 2: Definition of the
product/services-type needed
Step 1: Recognition of a
need
Step 3: Development of
detailed specifications
Step 6: Evaluation of
proposals and selection of a
Step 7: Selection of a orderplacement
Step 8:Evaluation of
product performance
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When customers were asked the question: Which method has your company used
to buy IT projects? the most answers are open bidding (88%) and then
competitive offering (75%), and limited bidding (31%). The reasons for that
are due to regulations and the banks want to have more alternatives for supporting
final decision-making.
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Figure 10: Procurement methods for I T projects
(Source: Authors survey result - 3/2011)
IV.1.2 The buying center is formed due to regulations ofgovernment bodies and to reduce risks associated with investmentand purchasing decisions
For state-owned enterprises, the Buying Center must be set up for buying of the IT
projects in relation to the procurement procedures of the Bidding Law. For other
customers, the buying center would be formed when an IT project is implemented.
In whole, the aim of forming the buying center is to reduce the risks associated with
investment decisions, namely the procurement of IT systems. These risks include:
- Financial risks relate to investment costs of new products or costs associated
with new products affecting the operations of the organization.
- Technical risks arise from the new system, which does not meet the
expected technical requirements.
Based on results from interviews, to reduce these risks, banks and financial
institutions usually use some of the following solutions:
- Collecting as much information as possible about the new IT products and
systems, which will be purchased through presentations and technology andsolution demo from IT vendors; verifying customer reference list; or using
professional consulting services through the consultative contracts before
conducting the projects investment.
- Using a small number of IT solutions providers through establishing and
maintaining partnerships and strategic alliance with them, such as signing a
strategic partnership with an IT firm and a local system integration company
0 2 4 6 8 10 12 14
Open bidding
Limited bidding
Competitive offering
Corporate buying
Consultative services
Procurement methods
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- Using several suppliers to spread risk in the case of buying a large number
of IT equipments and having many alternatives. For example, when a bank
purchases servers for the nationwide branches, it could use 2-3 vendors and
from 2 to 3 local system integrators
Therefore, providing information on HP products, solutions and technologyservices directly to the buying center plays a vital role in the evaluation of
suppliers, IT product and solutions selection of banks and financial institutions. In
additions, the technology presentation with highlighted the benefits and the
specialized consulting services will help customers to understand HP products and
services.
HP sales and technical team management is ensured to provide products and
services which satisfy customers requirements. From that, it would bring
opportunities for HP in developing the customer relationships, from buyer-seller
relationship to strategic partnerships.
Strengthening relationships and building a network of partners of HP would help
customers having a choice of the local System Integrators (SI) providing HP
products and services to customers.
IV.1.3. Participants from IT department have significant influence inthe buying center
By answering the question of Who are the participants in the decision-makingprocess towards IT products and services? Who give the final buying decision?;
the most answers of interviewers vote for people from IT department. In the whole
procurement process of IT project, participants from IT department have significant
influences on final decision of products and services selected besides executive
level such as CEO, CIO and CFO. This practice is inflected in the interview with
Mr Nguyen Tuan Cuong, the IT director of SeAbank: Due to the specialization of
IT project, IT Head or IT Director would decide technical issues which impacts on
finance and investment budget of the project. According to result of survey, they
could be the IT director, the solution architects, the software/hardware and
applications specialists in the organization; the experts in banking, finance or
insurance sectors; or the consulting units, or independent consultants. The details as
follows:
- IT director - technical decision maker who will drives IT strategy, approve
integrated IT solutions, facilitates processes and governance are in place to
coordinate data center functions.
- Functional IT managersTechnical influencers, includes:
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o Server Manager: Recommends and/or strongly influences the
purchase of server solutions; closest to the pains associated with
server sprawl and with deployment of new application infrastructures
o Network Manager: Owns core and edge network architecture
decisions
o Storage Manager: Makes/influences purchase decisions in enterprise,
and some midmarket companies, coordinates with Server Manager or
Admin for cross-functional initiatives
- Solution Architect, technical influencer, who influences purchase decisions
by making decision on solution architecture and technology selection.
- Sometimes, application manager influences on platform selected for
application running on.
In some cases, participants from IT department play role of gatekeepers who
control the information input/output between the project teams or the project team
members. IT departments could affect decisions through identifying and deciding
which information about products and solutions could be provided to decision
makers.
The key decision makers in IT project is summarized in the following diagram:
Figure 11: Parti cipants in the buying centre for IT projects
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(Source: Authors survey result - 3/2011)
Understanding the roles and their influences of participants in buying center will
help HP to have a plan approaching the buying center. This approach helps HP
ensure that product information provided to the right people at right time in order to
support the customer's decision-making process.
IV.2 Key factors influencing buying behavior of corporatebuyers in banking and financial sector in Vietnam
IV.2.1 Personal factors
Personal factors group include anthropological factor and psychological factor
which influence personal buying decision. According to the survey, 87.5% of
member who join buying center has University qualification and 12.5% has master
qualification, while 50% has 6-10 years working experience and 50% has less than
5 years experience.
CEO/CIO/CTO
Business decision maker
CFO/Procurement
Economic decision maker
IT directorTechnical decision maker
Solution architect
Technical
influencer/decisio
Functi
Techni
Serv
Netw
Stora
Application ManagerTechnical influencers
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Personal experiences of participating in buying center for IT projects have a strong
influence on buying decision. According to the survey, 63% responses are
frequently participate in IT projects. These experiences might help to reduce
risks through assessing products and services. Therefore, good experiences with HP
products and services will support these participants in making decision on ITproducts and services selection.
Figure 11: Frequency of participating in buying center
(Source: Authors survey result - 3/2011)
Personal factors directly influence buying decision when participant play the role of
consumer during decision-making process.
IV.2.2 Organizational factors
Organizational factors influence corporate buying decisions includes size of the
company, profitability, corporate culture, organizational policy.
According to the interviews, the size of banks and financial institutions influences
their buying decisions. In general, the bigger the size, the longer making decision
process will be, due to the complicated policies and large numbers of people
involved in buying process. However, with annual projects and the same value
projects, the large bank might be making decision quicker than small commercialbank, due to the fact that large scale banks have more experiences and resources
which allow them to make technical decisions quicker. Therefore, annual buying
projects are completed in short time.
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Type of business also influences buying decisions. With state-owned companies,
the process of making decision and buying IT projects need to follow closely
policies and regulations. This factor affects the length of IT project, as stated in the
interview with Mr. Trinh Quoc Bao, VietinBank: the buying process takes longer
time, usually more than 12 months for a project, in comparison to a projectimplementation in commercial banks and joint-stock securities companies which
takes average of 6 months each
According to the interviews, the business results and profit of the company at the
time when the project is carrying out also influence IT buying decisions. If the
company has good business results, the IT system also needs to be invested to meet
the demand of business development. Therefore, IT project would be paid more
attention.
Some companies, such as Techcombank and FPTS, consider IT as a key to create
competitive advantages, so that IT projects are invested and deployed quickly.
IV.2.3 Market factors
Due to the characteristics of banking and financial industry that requires high level
of IT application, the number of rivals in this industry is very high. According the
interview, so many suppliers are providing IT products and services for banks and
financial institutions in Vietnam. It means there could be many substitutes in term
of IT products and services in the market, so that the competitiveness is higher.Besides the penetration of the world leading IT vendors like IBM, HP, Oracle/Sun,
Cisco, Dell, NetApp, Microsoft, SAP, there are also local IT system integrators
such as FPT, CMC, HiPT, HPT, Amigo. The competitiveness is higher as the more
IT providers target to banking and financial industry.
According to the interview, bank and financial companies have at least 3 to 5
alternatives that meet each IT project requests. For instance:
- For servers requirements, customers can choose IT products and solutions
from IBM, HP, Dell, Oracle/Sun, and since the last two year they can choose
products from Cisco
- For storage system and data protection requirements, customers can consider
products from many providers, such as IBM, HP, Dell, EMC, NetApp,
Hitachi
- For networking and security solution, customers can consider solution from
Cisco, Juniper and since 2010, they can consider HP as an alternative with a
wide range of products for different requirements from SMB to enterprisecompanies.
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- For networking and servers management software, customer can choose
solution from IBM, HP, BMC, CA
All main brands such as IBM, HP, Cisco, Oracle/Sun have branches in Vietnam.
Others like Dell, EMC, NetApp, BMC also has representatives offices in Vietnam.
Furthermore, local companies also have partnership with at least 2 suppliers. Thus,the competitiveness is higher.
Figure 12: Vendors in Vietnam FSI Sector for IT infrastructure project
(Source: Authors survey result - 3/2011)
The customers in such competitive environments will be approached by number of
suppliers, therefore, the customers in banking and financial sector usually have
complicated relationship with many different suppliers or choose some strategic
relationship with a few of suppliers, which is the most suitable for the institutions.
Checkpoin
Dell
Juniper
HP
Cisco
Oracle
/Sun
Servers
HP
EMC
Storage
NetApp
HDS
IBM
IBM
IBM
Oracle
/Sun
Cis
Cisco
DellCA
BMC
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With this idea, HP needs to improve its business and technology to supply the
suitable products and solutions to meet customers requirements, increase
customers satisfaction when using HP products and solutions. Then, HP can
upgrade the relationship with customers, from buyer-seller relationship to strategic
relationship with banks, financial institutions, and insurance companies. From that,HP can support customers better, helps customers grow their business. From this
strategic relationship, HP can reduce its competition with its competitors.
With the local system integrators (SI), HP needs to enlarge relationship and build
the strong network (partners, resellers), build promotion programs, support partner
and make differences and create more benefit for partners, to pull strongly up the
supply products and services of HP to customers.
IV.2.4. Environmental factors
Elements involved business environment have strong effect with buying decision,
and investment of customers. In the period of 2006- 2009, the stock exchange in
Vietnam increased rapidly. Number of securities companies came out. From that,
the need of IT investment for security companies also increased.
Otherwise, in the time to prepare the report, from first quarter to the second quarter
2011, economic factors like global economic downturn, financial crisis, the
decrease of funding sources from foreign organizations and the public spending-
cutting policies of the government affects directly to IT projects. When theVietnam economy faces difficulties, such as high interest rate, high inflation rate,
gloomy stock exchange, which have strong effects on IT investment and buying
decision in banking and financial sector.
In this situation, HP needs to have flexible policy in term of doing business. It
could be creating mechanism to help banks and financial institutions to speed up
the of IT application by reducing prices, operational expenditure or leasing IT asset
instead of investment with high capital expenditure.
IV.3 Criteria on evaluation of suppliers, products and solutions
IV.3.1 Criteria on IT vendor evaluation
There are some criteria used to evaluate and choose IT suppliers for banking and
financial customers. According to interviews results, they are price of products and
services, quality of products and services, technology & products features; the
brand name; warranty & support term (attached services); delivery schedule and
country of origin of products.
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100% of respondents said that prices of the products and services is the most
important criteria of supplier evaluation and 94% of respondents vote for wide
range of products and services portfolios. The price of products and services is
total cost of ownership including capital expenditure (CAPEX) and operational
expenditure (OPEX).Meanwhile, with 81% of respondents replied the criteria on quality of products,
installation and implementation services and payment term are the next choice for
evaluating the ability of serving, deploying, and supporting projects and reducing
risk of the projects.
Following are criteria of after-sales services and delivery schedule of project
with 75% of response.
The result of interview is indicated in the figure below:
Figure 13: Cri ter ia on IT vendors (suppliers) evaluation
(Source: Authors survey result - 3/2011)
Along with IT vendor evaluation criteria, HP is considered as one of top-three ITvendors in Vietnam banking and financial market with IBM and Cisco.
IV.3.1 Criteria on products and services evaluation
After came with short list of qualified vendors, the requests for proposal (RFP) are
sent to selected vendors for solutions acquisition. Evaluating and choosing supplier
processes require many people from different departments of the organization to
participate in buying center and include the assessment of both technical and
financial criteria.
0% 20% 40% 60% 80% 100%
Country of Origin
Nation-wide service coverage
Delivery schedule
After sales services
Quality of products
Payment term
Installation services
Wide range of products and services portfolios
Price of products and services
63%
63%
75%
75%
81%
81%
81%
94%
100%
Criteria on IT Vendors evaluation
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In term of technical view, the criteria of the compatibility of the products and
solutions with the requirement of the corresponded software is considered with 94
percent of answers. The following are quality of products and services,
technology used and product features and the brand name are three criteria
with responsiveness of 81 percent.From financial perspective, 88% of respondent said that price of products and
services is important criteria with high weight when making score card of overall
evaluation.
The results of interview are shown in the figure below:
(Source: Authors survey result - 3/2011)
The criteria of the compatibility of the products and solutions with the requirement
of the corresponded software is so important to the customer because the IT
infrastructure projects are implemented for an application software. It can be the
software for core banking system, such as i-flex Solutions, Inforsys, TEMNOS,
Sunguard, Silverlake or for securities or insurance software. So that, its is
crucial for HP to co-marketing and co-selling with software vendor in this customer
segment.
Therefore, the requirements of customers in financial area with the products,
solutions and services increase. The scale of the effect of the technology is
increased. Customers can aware the roles of technology in producing process,
business, management and the development of their organization. This is both the
opportunity and the challenge for technology brand like HP in financial sector in
Vietnam.
IV.4 Advantages and limitations of the survey
0% 20% 40% 60% 80% 100%
Country of Origin of the products
Delivery schedule
Warranty & support term (attached
The brand name
Technology & Products features
Quality of products and services
Price of products and servicesThe compatibility with software
63%
75%
75%
81%
81%
81%
88%94%
Criteria on IT products and services evaluation
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The results are from interviews directly with customers and HP employees who are
needed to investigate. From that, the author has in-depth understanding about the
buying decision of customers in banking and financial sector in Vietnam. The
details about the methods of investment and purchase of a information technology
project, the process of decision are also found from interviews.Because of the limitation of time and resources, the writer only can approach some
kinds of customers, which may be not representative for all customers in financial
area. Moreover, some sensitive information of customers in investment of
technology systems recently is not allowed to use. Therefore, the report cannot
represent all the information collected. However, the main results of interviews and
surveys with customers are suitable with the theories used in the final project.
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CHAPTER VRECOMMENDATIONS AND CONCLUSIONS
In this Chapter, the author gives recommendations for the problems of HP Vietnam
in accordance with findings from the previous chapter. The last
V.1 RecommendationsRecommendations for HP Vietnam include the following contents:
- Recommendations on changing the way to approach the buying center of
HPsbanking - finance clients, focusing on building relationships with those
involved in the buying center and affect the decision to select IT products
and solutions from HP
- Recommendations on marketing to convert potential customers to
contractual customers, including communication and marketing plan for the
products of HP and solutions for banking finance institutions, focus on
three main groups including: direct sales, direct marketing and mass
marketing
- Recommendation on plans of building and developing the sales team, aims
to reach and strengthen its relations with the buying center in many different
levels, such as levels of management (C-level), level of IT governance (IT
Director), the technical experts of the customers (Solution Architects,
Functional managers )
V.1.1 Change the way to approach the buying centerof banking andfinancial customers
Based on the finding results of the buying center in the banking finance customer
groups, there are several main groups should be approached and executed
marketing about HP technologies, products and solutions. Direct marketing to the
buying center helps customers address the difficulties in providing IT infrastructure
to meet business needs, reduce operating and maintenance costs, create a
competitive advantage in business for these organizations, include:- Direct marketing to C-level, including CEO, CIO/CTO, CFO - the business
decision makers, who will affect the procurement of IT. Aim to bring the
business value of HP technology, products, solutions and services to the top
level of customer, such as: increase revenue and productivity, reduce
operation costs (CAPEX & OPEX), better ROI of IT investment, increase
the value of services provided to customers to meet the change of business
environment, thereby creating competitive advantages for banks and
financial institutions.
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Figure 14: Di rect marketing to the buying center
(Source: Authors survey result - 3/2011)
- Direct marketing to IT Director of the bank, insurance, finance and securities
companies who is in charge of IT operation, which serves the business
activities of the organization. The value that is created from the technology,
product, solutions and services of HP helps IT center support best for the
production and business organizations to ensure IT systems meet the
professional and business needs, provide information and support decision-
making for leaders at all levels based on the support of IT systems.
CEO/CIO/CTO
Business decision maker
CFO/Procuremen
Economic decisio
IT directorTechnical decision maker
Solutio
Techni
influen
Application ManagerTechnical influencers
HP sales team
External Business/IT ConsultantBusiness/Technical Influencer
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- The direct management of IT systems, administrative and operation
technicians those who have direct influence on technical decisions, who
will evaluate the technology, products , solutions and services from suppliers
and propose options for senior leaders in the process of evaluating and
selecting vendors or products to buy. Marketing plan for those people is toensure the technology experts, engineers, operators understand and
recognize the value that technology, products, solutions and services of HP
could bring back, which helps build IT infrastructure to provide to other
departments in the organization as a service (IT as a service) to meet the
business requirements of different users within the organization or provide
valuable added services to customers outside the organization.
So, with the plans of direct marketing to buying center, it ensure all participants in
the buying center can be approached and aware of the value that technology,products, solutions and services of HP offers for organizations that will actively
support the process of decision-making to choose and use the HP products and
services.
V.1.2 Marketing to convert potential customers to contractualcustomers
Communication plan is an important part of marketing campaigns to business
customers, especially to the buying center. Communication plan based on the
"Customer Beaching model," in which the goal is clients, in many different levels,
corresponding to each different media plans. Recommended communications plan
for the HP Vietnam company which is described in the figure below.
Figure 15: Communication plan
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- Direct sales are used for customers on the list of contacts that were already
in contact before. Through direct sales method, the sales team of HP directly
approach participants in the buying center, including presentation and
demonstration of HP products, technologies, solutions and services;
customer reference story or through the same type of customer who need the
same solutions of HP, or through specialized documentary introduces the
proposed solutions for each client with the specific and different
requirements.
- Direct Marketing is used for customers who are in the database of the
company, using tele-sales who collect the requests of customers, scan and
transfer to the customer database in order to get closer to the customers. To
update this database can also be done by workshops, new products or
solutions for customer groups, such as banks, securities companies,
insurance companies, financial services companies. It is also possible to do
marketing through other media such as newsletters, brochures.
Customers
Mas(reco
Business cards
Sales arguments
Customer referencestory
Solution demo
Proposal
Contract
Direct Sales(Current activities)
Presentation
In databaseIn contact
Brochure
Telesales
Mailing
Newsletter
Direct Marketing(recommendation)
Launching events
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- Mass marketing is executed with the aim to gain customers awareness of
HP products and services in general and in banking and financial sector. The
media can be used for this form of marketing such as press releases (in the
rollout of products and solutions), Networking through social networking
sites like Facebook, Twitter, LinkedIn, or through seminars, such asVietnam banking, Finance Vietnam, the CIO forum club.
V.1.3 Sales team management
Managing the sales team is one important factor, determining the success of the
marketing plan to the customer's buying center. According to customer relationship
approach model presented in the upper part, the HP Vietnam company should re-
organize and build its sales team in accordance with the IT procurement decision-
making process of customers in banking and financial sector.
The sales team needs clearly dividing into different customer groups to fit with
different plans. New customers need a longer access time, more effort to gather
more information through various meetings. For expanding the market, the sales
must be more cautious in sales forecast. Meanwhile, the group of existing
customers (already there), based on trust and knowledge of customers business,
the HP sales team will focus on building projects for straight re-buy to simplify the
access to positions in buying center. However, these are existing customers,
maintain a good relationship to ensure current operations of the company.
Select 2-3 important customers of competitors or potential new customers in one
year, sales team need to develop and implement plans to reach the entire buying
center which influence the IT buying decisions of these customers. Their decision
is often slow, so the sales forecasts should be made in the medium term period
(mid-term), while the others should be conquered, so choosing the right person to
contact, to impact, thus the process of decision making can be faster, could carry
more customers at the same time.
For the HP sales team to bankingfinancial market, it needs to build a multi-levelteam, supported by participants in the buying center. For example:
- HP Sales Executives, Account Managers, Key Account Managers support
for accessing and marketing to management levels of the enterprises such as
CEO, CIO / CTO and IT Director
- HP Consultants, such as presales, solution architects, are to support and
access to experts in architecture in the banking system to support the
company or consulting solutions and technologies to satisfy the customer
demand.
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- HP product managers support in presenting product features and technology
demonstration, highlighting differences with products and solutions of other
goods, creating a competitive advantage when evaluating vendors, as well as