Peoplesoft admits customer service shortfall

Applications vendor Peoplesoft has become the latest casualty of the slowdown in the ERP market, after admitting its commitment to quality and service has not been up to scratch.

At its annual user conference in New Orleans last week, Craig Conway, chief operating officer of Peoplesoft, said in his keynote speech the vendor had seen a drop in customer satisfaction during two successive quarters.

"The proportion of customers who said they were extremely satisfied with Peoplesoft fell to 84 per cent. We made mistakes, I sincerely apologise and we need to move on," he said.

Mike Goija, executive vice president of products and technology at Peoplesoft, admitted that some releases had contained too many bugs, customers did not have enough information about how to tune application performance, and that costly upgrades were being shipped too frequently.

In an effort to kick-start growth, Peoplesoft plans to introduce a strategy, scheduled to start on 1 January 2000, to test product on all supported platforms, offer a broader beta testing programme prior to general product release, and to begin cross-product line testing.

Josh Greenbaum, principal analyst at Berkeley-based Enterprise Applications Consulting, said: "Peoplesoft was right to be contrite about the situation."

Jim Holincheck, an analyst at Giga Information, added: "It has been a bit too positive in the past about upcoming announcements without being concerned enough about the present."

PeopleSoft, in common with other applications vendors, has been finding it difficult to sell backbone ERP products, such as financials and human resources, particularly in North America where its traditional government and education customer base has frozen spending because of the year 2000 problem, (PC Dealer, 1 September).

But Ron Belt, an analyst with investment banker ABN Ambro, claimed: "People are fed up with ERP and it's no different with Peoplesoft."

As a result of this attitude, the applications vendor aims to develop alternative revenue streams, part of which means ensuring customers are satisfied enough to purchase add-on products and services.