Management Update: Gartner s 2003 CRM Field Service Management Magic Quadrant

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1 IGG M. Maoz Article 26 February 2003 Management Update: Gartner s 2003 CRM Field Service Management Magic Quadrant Gartner s 2003 Customer Relationship Management (CRM) Field Service Magic Quadrant shows a splintered assortment of niche vendors. That situation indicates a poor understanding of the scope of opportunity in optimizing field service processes and the absence of a thought-leading vendor. Many enterprises are looking into how field service automation can help with sales opportunities and also drive down operational costs. Gartner s 2003 Customer Relationship Management (CRM) Field Service Management Magic Quadrant shows a splintered assortment of niche vendors. That situation indicates a poor understanding of the scope of opportunity in optimizing field service processes and the absence of a thought-leading vendor. Field Service Requirements The Gartner CRM Field Service Management Magic Quadrant is not primarily an evaluation of software functionality. Comparing software packages for field service management poses unique difficulties. The Magic Quadrant assesses a vendor s ability to sell, deliver, deploy, maintain and upgrade useful packaged software. The complexity of scheduling and dispatching field technicians varies greatly from industry to industry. For example, to schedule telephone repair personnel (where the number of technicians reaches into the thousands or tens of thousands), repairing damaged lines across wide geographic areas and multiple area codes, differs greatly from a printer manufacturer dispatching a small force of maintenance personnel on routine service checks. Examples of requirements which are often industry-specific are: Wireless device support (Pocket PC, personal digital assistant, smartphone) Mapping and workforce scheduling Access to inventory and parts information Inventory planning Entitlements lookup, contract management Gartner Entire contents 2003 Gartner, Inc. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.

2 View of shipping and procurement procedures Ability to create a purchase order, bill of materials or invoice No such product currently supports all the required functions for a large business across multiple sectors, leaving enterprises to stitch together their own solutions. The uniqueness of the various industry needs has meant that field service software vendors historically have had to build highly specific solutions for the service management model and specific workflow processes of the given industry to win business. This situation worked to their advantage so long as buyers were not interested in broader application components for the rest of the demand chain, such as sales, marketing and partner channel management. With the recent emergence of entry-level field service functionality in enterprise application packages from vendors such as Oracle, PeopleSoft, SAP and Siebel Systems, enterprises are, for the first time, seeing alternatives to the point solutions from the smaller vendors. The challenge for the field-service-specific vendors continues to be in expanding the industry presence from the perspective of domain expertise and functional depth, together with convincing integration capabilities. Creation of new industry packages is very expensive and resource-intensive and has been beyond the abilities of the point solution vendors. Through 2006, no packaged field service application will address the end-to-end service management needs across multiple industries (0.7 probability). CRM Field Service Management Magic Quadrant Dozens of vendors provide varying parts of a field service solution, and Gartner s CRM Field Service Management Magic Quadrant (see Figure 2) looks specifically at the ability of the processes to dispatch and support field service agents. The CRM Field Service Management Magic Quadrant is an assessment of a vendor s ability to sell, deliver, deploy, maintain and upgrade useful packaged software for customers. Figure 2 Gartner s 2003 CRM Field Service Management Magic Quadrant

3 Challengers Leaders Ability to Execute Amdocs MDSI Astea International SAP FieldCentrix J.D. Edwards Wishbone Systems Me trix Niche Players Oracle Siebel Systems PeopleSoft As of February 2003 Visionaries Completeness of Vision Source: Gartner Research MDSI Mo bile Da ta So lutio ns Inc. Leaders Quadrant Gartner s criteria for leadership are: 200 field-service-automation-trained professional service personnel Partnerships with external service providers in two geographic regions The vendor generated at least $50 million per year in customer-relationship-managementrelated revenue 20 references into production during the past 12 months across geographies Proven ability to deliver field service, workforce management, customer service, parts logistics Business intelligence and analytics, and a wireless communication layer Native call center for skills and dispatch Flexible integration to multiple enterprise resource planning systems Field service applications that are part of a broader suite of applications to manage customer life cycle

4 Gartner assesses that no vendor is compelling or comprehensive. Siebel Systems, the only vendor in the Leaders Quadrant, is the first of the large-enterprise application vendors to deliver a stable base of referenceable customer implementations across several industries, primarily in the high-tech, industrial and medical-equipment industries. Siebel has benefited from the increased buyer emphasis on vendor viability over superior domain knowledge of the service business. Siebel has made smart use of partnerships to span gaps in the product line, such as wireless, mapping and parts planning, as well as training integrator partners in the use of its systems. Thirdparty integrators are used in more than 75 percent of the larger deployments, compared with the 20 percent average common with competitors. Siebel still has only a minor number of wireless customers among its installed base. The product will be improved to cover weaknesses in inventory planning, contracting, and more-flexible workflow and assignment rules during the next 18 months. Siebel will remain the leader in field service applications through 2005 (0.7 probability). Challengers and Niche Players Quadrants The challengers and niche players are narrowly focused. The software vendors in the Challengers and Niche Players Quadrants collectively deployed as many field service licenses in 2002 as did the leader, Siebel. Yet, beyond the focus on production seats, those vendors have created useful products for particular markets. The Challenger Mobile Data Solutions Inc. (MDSI), the only vendor in the Challengers Quadrant, has had a difficult 18 months. During that time it reduced head count more than 25 percent, divested its hosting business, retreated from two industry verticals, and suffered the effects of budget cutbacks in its core industries of broadband and telecommunications. Although the ideligo and Advantex r.7 products are strong, the product management teams at MDSI continue to struggle to sell into the market. Through 2005, MDSI will struggle to market the core products and broaden the field service offerings sufficiently to ensure its place as a challenger (0.7 probability). The forecast for the company will depend on the willingness of the systems integrators to bring MDSI into the technology refresh initiatives under way at many European and North American telecommunications companies. The Niche Players Astea International, which focuses on capital equipment manufacturers, produces solid references to attest to its deep industry expertise and ability to integrate with enterprise resource planning (ERP) and legacy systems. It is not yet strong in the wide-scale use of wireless or thin clients, but otherwise it is very capable in its core industry. A key challenge for Astea is to prove that it can both market to new customers and convert customers of its older products to the new Web architecture. SAP has made large improvements to its field service abilities and should easily push into the Visionaries Quadrant during The product is to be considered for current SAP customers. It has compelling price points for user licenses that are 20 percent of the industry average. Although integration with parts supplies stored in other SAP modules is strong, as would be expected, enterprises have found the interface clumsy, with poor descriptions of the underlying ERP codes. These issues derive from the immaturity of the deployment teams rather than product deficiencies. These same challenges are evident in implementations for creation of bills of material and parts costing. Mobile capabilities on the latest versions (v.3 and later) are still in development. Historically,

5 North American customers requiring additional functionality have been wary of the need to work through the European development team. A major initiative at SAP Americas is to reduce this area of concern by 2H04 (0.7 probability). Metrix continues to deploy to a small but satisfied group of field service customers who attest to its strength with parts sourcing, time tracking, contract management and costing of service calls. The company will need to demonstrate wider capabilities in reporting, handling of multilanguage operations, production customers for real-time (wireless) operations, and tax and accounting rules. The larger challenge for the company is to successfully partner with broader CRM and business application vendors to gain more market penetration. Amdocs offers ClarifyCRM, which has a large installed base but few new customers. Weaknesses include the lack of a single interface for customization and database management, and poor migration tools for customizations that are created in test environments and need to be moved into production. Through 2004, Amdocs will continue to focus on upgrading its core customer service and sales systems before delivering differentiable field service capabilities (0.6 probability). FieldCentrix provides one of the best mobile support technologies, as well as functionality and professional services that map very well to the heating, ventilating and air conditioning (HVAC) and building trades generally. The challenge for this small vendor will continue to be broader market acceptance. Although FieldCentrix has demonstrated ability to deliver excellent mobile and wireless solutions, it has been less successful selling a complete service solution at a time when buyers are looking for less complexity. As competitive products from suite vendors improve through 2005, FieldCentrix will merge or be acquired (0.8 probability). J.D. Edwards is new in the Magic Quadrant, selling a few service and warranty management systems (which are integral parts of J.D. Edwards ERP system) into its installed base. It is still early for the vendor, and it has yet to demonstrate much expertise in the use of wireless or truly mobile solutions. Wishbone Systems is a small vendor focused on service management. Its Microsoft-centric product, WorkOptimizer, performs scheduling, workforce management and optimization functions in the telecommunications and utility space. Limited funding and partnerships, together with its being a privately held company, continue to complicate vendor selection. Visionaries Quadrant Visionary vendors are emerging. Oracle and PeopleSoft have both demonstrated a strong understanding of the needs of service organizations beyond the ability to dispatch and manage field technicians. Oracle, though it currently lacks sufficient expertise at selling and deploying its system, has the industry knowledge to have a strong impact on the market. It will require at least two years to complete the product gaps (flexible screen design, mobile and wireless capability), to build the professional-service capabilities to help customers deploy (exploiting time and material capabilities, billing, contract integration and multi-industry knowledge) and to convince systems integrators that the product is best-of-breed. By 2005, Oracle will be among the top four field service providers as measured by customer satisfaction and size of production base (0.7 probability).

6 PeopleSoft is only in its second year as a provider of field service products, but it is making significant strides, particularly in the area of installed-base management. Currently, its product excels at flexibly designing business process rules, yet customers are often not adequately trained to take advantage of these capabilities. It has yet to demonstrate mobile and wireless scalability and does not yet contain broad industry templates. In addition, few of PeopleSoft s integrator partners (for example, IBM, Accenture and BearingPoint) are in a position to use the field service offerings. By 2005, PeopleSoft will complete a competitive product, convince the market of its commitment to deliver best-of-breed functionality, and deliver the customer examples and professional services that the sales force will need to compete in the market (0.7 probability). Complementary Vendors Field service processes vary widely from industry to industry, and with them the technology requirements. Filling the gaps in field service products are a wide range of vendors not appearing in the Magic Quadrant. They deliver products for the following: Wireless device support, such as for Pocket PC, personal digital assistants, smartphones (for example, Antenna, Intermec Technologies, Xora) Mapping (for example, MapInfo, ESRI) Workforce scheduling (for example, a.p.solve, ClickSoftware, River Run Software, ServicePower, Telcordia Technologies) Access to inventory and parts information, and inventory planning (for example, Servigistics, Xelus) Many of those companies will eventually be absorbed in the larger enterprise application vendors. They offer compelling point solutions that are often embedded in the field service packages in the Magic Quadrant, but they are not evaluated formally in the Magic Quadrant process, because they do not form the core of the field service solution. Bottom Line Field service automation is a complex process that varies widely from industry to industry. No vendor is likely to deliver an end-to-end solution in the next three years, leaving enterprises the difficult task of weighing best-of-breed functionality from established (and often financially not viable) vendors against accepting less functionality from a vendor that will, with time, have a broader application presence within the enterprise. The larger enterprise resource planning vendors are only beginning to develop industry domain expertise, and enterprises must evaluate how well these products perform for the required industry. Enterprises should take the following precautions: Exercise caution with the point-solution vendors (Astea, FieldCentrix, Metrix, MDSI, Wishbone) because 80 percent of them are unlikely to remain independent through 2005 (0.8 probability). If a point vendor is selected or being used, contingencies must be in place in case of acquisition or failure.

7 New evaluations should consider the degree of match between the technology base of the vendor and the technology strategy within the service organization. Written by Edward Younker, Research Products Analytical source: Michael Maoz, Gartner Research