Rackspace IT Industry Service Report A study into the cost of poor IT customer service Rackspace IT Industry Service Report A study into the cost of poor IT customer service PAGE: 1
TABLE OF CONTENTS DESCRIPTION PAGE Foreword 3 Research 4 Infographic 8 About Rackspace 9 Contact Rackspace 10 Rackspace IT Industry Service Report A study into the cost of poor IT customer service PAGE: 2
Foreword In today s highly competitive IT market, customer support is becoming a crucial issue. British businesses have grown more discerning and satisfactory service is no longer good enough. IT providers who cannot meet customer expectations are losing out on business with 69 per cent of organisations dropping IT suppliers in the last year due to service shortfalls. Interestingly, customer service failings do not tend to make headlines when it comes to the IT industry. However, it is clear that service issues exist and are shaping the way that businesses view IT providers. Customers are forming their opinions based not only on their hardware and the IT services they consume but also on the IT people they come into contact with, how these people perform and how they (the customer) are treated, said Stephen Mann, Senior Analyst serving infrastructure and operations professionals at Forrester in a recent blog post. Customer service has become as important as price, technology and security in IT procurement decisions. In a recent Rackspace study of 250 businesses, 75 percent of respondents cited customer service as a top or growing priority. This can be linked back to the business impact of poor service. Our study showed that UK employees are losing an average of almost five hours per week due to IT service issues. In total this equates to over a billion wasted man hours per year. At Rackspace we put customers at the heart of the businesses. Our Fanatical Support offering is designed to offer the highest standard of service in every customer interaction. Rather than relying on scripts to solve problems we have a passionate team who will go beyond the call of duty to make customers happy. We are available 24/7, 365 days a year and our team will break through walls to make sure customers are taken care of, and problems are resolved. Taylor Rhodes, Managing Director, International, Rackspace PAGE 3
1. What are the key factors that businesses consider when selecting an IT services provider? While security remains a major concern for businesses, customer service has also been identified as a critical issue that organisations need to be confident of before outsourcing IT services. 48 per cent of enterprise respondents gave customer service the maximum importance rating. Medium sized are even clearer on the role of customer service with 55 per cent of this group giving it maximum importance. Enterprise responses for what is of maximum importance when selecting an IT supplier 2. Customer service is becoming increasingly important 75 per cent of organisations stated that the quality of their IT service providers customer service has reached or maintained a high priority level over the last twelve months. 27 per cent of organisations already regarded customer service as a key issue with an additional 48 per cent claiming that it became an increased priority over the last year. PAGE 4
3. What are the main drivers behind the high importance of IT customer service? Nearly two- - - thirds of mid- - - sized business respondents and just over half of enterprise respondents reveal that technology is becoming increasingly important in their organisations. They link this directly to the importance of customer service from the companies delivering this critical technology. A heavier reliance on off- premise IT, including cloud computing, is also directly linked to the growing importance of customer service. When businesses outsource to IT providers they expect strong support from the organisations who manage services on their behalf. PAGE 5
4. What are the most common customer service failings by IT Providers? When asked about biggest failing customer service, a clear message emerges. The more automated elements of the service package, including usability of web services and availability of support tools, are seen as satisfactory by most. The major issues are directly at the customer interface - how well customer service teams communicate and how quickly they respond to faults. 5. Customer service failings lead to lost productivity Poor customer service is leading to significant levels of lost productivity in UK businesses. 39 per cent of IT staff are estimated to be losing around a minimum of six hours or more per week tackling IT problems and chasing suppliers. The average number of hours lost due to these issues is five hours 23 minutes per week. IT STAFF PAGE 6
Poor customer service is also impacting non- IT staff. 32 per cent of employees are estimated to be losing around six hours or more per week tackling IT problems. On average, non- IT employees lose almost five hours per week due to IT service issues. NON- IT STAFF 6. Contracts lost Seven in ten (69 per cent) of the organisations surveyed say that poor customer service has been at the root of outsourcing contract cancellations. IT contracts worth between 850 thousand - 2.3 million were dropped by respondents over the last year, directly in response to service issues. PAGE 7
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About the research This research was conducted by Vanson Bourne in September 2012 amongst 250 organisations with at least 250 employees. The study included organisations from private and public sectors. Vanson Bourne is a specialist research- led consultancy carrying out user research within a technology context. Vanson Bourne's clients range from start- ups to well- known companies that need expert guidance, delivering robust and credible research- based analysis. About Rackspace Rackspace Hosting (NYSE: RAX) is the open cloud company, delivering open technologies and powering more than 190,000 customers worldwide. Rackspace provides its renowned Fanatical Support across a broad portfolio of IT products, including Public Cloud, Private Cloud, Hybrid Hosting and Dedicated Hosting. The company offers choice, flexibility and freedom from vendor lock in. Rackspace has been recognised by Bloomberg BusinessWeek as a Top 100 Performing Technology Company and is featured on Sunday Times list of 100 Best Companies to Work For. Rackspace was positioned in the Leaders Quadrant by Gartner Inc. in the 2011 Magic Quadrant for Managed Hosting. Rackspace Limited, the UK subsidiary of Rackspace Hosting, is headquartered in San Antonio with offices and data centres around the world. For more information, visit rackspace.co.uk. PAGE 9
Rackspace Hosting Global Headquarters 5000 Walzem Road San Antonio. TX 78218 Phone: 800-961-2888 Intl: +1 210 312 4700 UK Office Rackspace Ltd. 5 Millington Road Hyde Park Hayes Middlesex, UB3 4AZ Phone: 0800-988-0100 Intl: +44 (0)20 8734 2600 Benelux Office Rackspace Benelux B.V. Teleportboulevard 110 1043 EJ Amsterdam Phone: 00800 8899 00 33 Intl: +31 (0)20 753 2301 Hong Kong Office 9/F, Cambridge House, Taikoo Place 979 King s Road, Quarry Bay, Sales: +852 3752 6465 Support +852 3752 6464 Australia Office Rackspace Hosting Australia PTY LTD Suite 3, Level 7 210 George Street Sydney, NSW 2000 Australia Phone: 1-800-722577 Rackspace IT Industry Service Report A study into the cost of poor IT customer service PAGE: 10