FP Writing_Nguyen Minh Duc_MBM8_Viet-Bi v10.0 (1)

7/27/2019 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

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social networ

web marketpl

retail

touch-points

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Customer service

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Virtual

TellerVirtual

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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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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



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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

-

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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


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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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


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


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


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:


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


- 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

Documents

FP Writing_Nguyen Minh Duc_MBM8_Viet-Bi v10.0 (1)