The Forrester Wave : B2B Order Management, Q4 2015

Transcription

1 The Forrester Wave : B2B Order Management, Q Global Enterprises by Duncan Jones Why Read This Report In our 34-criteria evaluation of B2B order management (OM) providers, we identified the seven most significant vendors and researched, analyzed, and scored them. This report shows how each provider measures up. The downloadable tool linked to this report will help application development and delivery (AD&D) professionals choose the products that best fit their needs. Key Takeaways IBM, SAP Hybris, And Apttus Are The Overall B2B OM Leaders Forrester s research found that IBM, SAP Hybris, and Apttus met most of our requirements across all our criteria. Manhattan Associates, PROS, Kenandy, and Esker offer competitive options that all excels in their specific target areas. The B2B OM Market Is Growing As AD&D Leaders Look For Consistency And Flexibility Many AD&D leaders are unable to support customers demands for consistency, flexibility, and optimization from their current fragmented application landscapes. B2B OM solutions can solve that problem, bridging the gap between front and back offices while preserving business agility. Flexibility, Integration, And Optimization Are Key Differentiators In The B2B OM Market B2B OM helps AD&D leaders move beyond rigid enterprise resource planning (ERP) implementations and hard-coded integration with front-office applications. They support optimized pricing and availability along with enterprisewide consistency and visibility. The winners in this market will be the providers who best support customers need for business agility, especially in emerging digital business models. forrester.com

2 Global Enterprises by Duncan Jones with Christopher Andrews, Carmen Stoica, and Matthew Izzi Table Of Contents Notes & Resources Struggle With Fragmented Application Landscapes B2B OM Products Streamline Capture, Visibility, And/Or Execution B2B OM Complements Divisional ecommerce Platforms B2B OM Evaluation Overview Evaluated Providers Support At Least One Of The Four Subsegments Of B2B OM Three Products Lead Overall; Others Excel In Specific Areas Use The Downloadable Forrester Wave Model To Tailor Your Evaluation To Your Scope Vendor Profiles Leaders Strong Performers Supplemental Material Forrester conducted vendor briefings, product evaluations, and interviews of customer references in August and September Related Research Documents B2B Order Management Bridges The Gap Between B2B ecommerce And ERP The Forrester Wave : Omnichannel Order Management, Q Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA USA Fax: forrester.com 2015 Forrester Research, Inc. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. Unauthorized copying or distributing is a violation of copyright law.

3 For ApplicAtion Development & Delivery professionals seven leading providers streamline order capture And orchestration For complex, Global enterprises Global enterprises struggle With Fragmented Application landscapes omnichannel is a hot topic, but it is an unrealizable dream for many AD&D leaders within complex B2B enterprises. 1 A key foundation of omnichannel is B2B order management, an emerging software category that is enabling visionary B2B enterprises to meet their customers new, more demanding expectations. B2B om platforms enable AD&D leaders to harmonize and optimize customer-facing processes across a fragmented application landscape. they connect a myriad of customer-facing applications with an equally diverse set of back-end erp instances via flexible workflow frameworks, thereby avoiding inflexible hard-coded integration. B2B om customers told Forrester that their platforms enabled them to deliver: B2B om platforms enable AD&D leaders to harmonize and optimize customer-facing processes across a fragmented application landscape. Consistent pricing, inventory availability, and order visibility to global customers. in most cases, each business division of an enterprise has its own customer-facing applications, with little consistency between online, direct, and distributor channels. A customer may get a different price and available-to-promise (Atp) quote depending on which of its locations places an order and by which channel. Flexible, optimized fulfillment models that are vital to winning business. many AD&D leaders we interviewed told us that in their markets, Atp was often more important than price in winning or losing a sale. they needed to be able to allocate products and/or capacity from wherever it was available, including suppliers locations and in-transit shipments. that s impossible to do with the standard rigid fulfillment logic that is prevalent in erp routings and hard-coded integration. For example, we spoke with a distributor of power tools that sells to construction and manufacturing businesses. its legacy process linked each customer with its closest inventory location. the distributor would miss sales, and risk losing the customer, if that location did not have the items the customer needed urgently, because it couldn t make inventory in other locations visible to the order capture process. New digital products with high service content. many of our research sources want to take advantage of the trend of shifting from one-off sales of physical items toward continuous delivery of digital services. But their existing systems can t cope with the new pricing, availability, and delivery sequencing implications of bundled offerings that include both physical assets and ongoing services. For instance, we spoke with two companies that make high-end medical devices, such as mri scanners. Both wanted to replace traditional sales of new equipment and repair contracts with an all-inclusive managed service, priced per scan. neither could handle the new requirements of this business such as asset management linked with service history or monthly invoicing linked to the scanner s actual usage within their legacy erp systems Forrester research, inc. Unauthorized copying or distributing is a violation of copyright law. citations@forrester.com or

4 B2B OM Products Streamline Capture, Visibility, And/Or Execution B2B OM is Forrester s term for a broad category of applications that help complex global enterprises bridge the gap between the front office and fulfillment. In speaking with the leading providers and with their reference customers, we found that the three themes described above consistency, flexibility, and digital business models were the main drivers of companies investment in B2B OM. Some planned to consolidate on one commerce platform and/or ERP instance in the long term, but they needed to implement B2B OM in parallel as an immediate solution. Others, more realistically, accepted application heterogeneity as a fact of life and decided that B2B OM was the best way to handle it. Either way, they wanted a single enterprisewide platform that could provide (see Figure 1): Consistent order capture across channels and business units. B2B OM includes services that front-office applications can call, such as pricing, configuration validation, and delivery date calculation. Reliable insight into order status, irrespective of which channel captured the order. These products track execution events to provide a consistent, up-to-date view of each order line s progress. Optimal order allocation between fulfillment systems. Business rules and optimization algorithms allocate order lines to the most appropriate execution applications. Harmonious orchestration of order execution. Process management tools trigger fulfillment events in sequence and drive reaction to mitigate delays. 3

5 FIGURE 1 B2B Order Management Links Fragmented Front-Office And Back-Office Environments Channels Markets Varying by market and channel Configuration Pricing Available-topromise (ATP) Lead time Capture Status Delivery Manufacture Amendments Rejects and returns Order management Consistent Flexible Digital Inventory Manufacturing capacity Transportation Allocation Execution Orchestration Scheduling Global trade compliance Invoicing Production division Varying by division and fulfillment method Fulfillment applications 4

6 B2B OM Complements Divisional ecommerce Platforms AD&D leaders should read this report in conjunction with Forrester s recent research into the market for B2B ecommerce platforms. 2 There are many overlaps between ecommerce and B2B OM, so it s up to individual clients to decide the scope of their specific B2B OM selection and implementation, depending on the capability and diversity of their ecommerce platforms. Complex enterprises will need B2B OM in addition to ecommerce because B2B OM: Provides consistency across multiple customer-facing apps. Many AD&D leaders work with autonomous sales divisions that expect to be free to make their own choice of ecommerce platform. They may also have separate systems for internal sales force automation and channel partner management yet still need to provide consistent information to customers. Such organizations may prefer services such as configure, price, quote (CPQ) and ATP to be within a central B2B OM hub rather than try to replicate and synchronize them in every front-office app. Distributes order lines flexibly and optimally to multiple back-end systems. The systems responsible for execution may include multiple ERP instances, separate applications like warehouse management and field service, or suppliers own systems. Companies with a simpler back-end landscape may not need a separate B2B OM platform between their ecommerce front end and their fulfillment platform. Supports but does not drive the sales process. B2B OM supports capturing an order accurately and orchestrating optimal execution. Our scope does not include functionality that directly supports the sales process but isn t relevant after the customer has placed an order, such as experience management, upselling recommendations, or lead tracking. B2B OM Evaluation Overview To assess the state of the B2B OM market and see how the leading products compare with each other, Forrester evaluated the strengths and weaknesses of seven top B2B OM vendors. After examining past research, user need assessments, and vendor and expert interviews, we developed a comprehensive set of 34 evaluation criteria, which we grouped into three high-level buckets: Current offering. We evaluated each product s ability to support the four main B2B OM processes: order capture, visibility, allocation, and execution. In line with Forrester s vision for business applications, we looked particularly for flexibility, ease of integration with applications, and optimization capability. Strategy. Companies implementing B2B OM should expect to use if for a long time, so they need a provider who will continue to be a Strong Performer in five-plus years time. We examined each provider s strategy to assess its vision, likely longevity, and commitment to the B2B OM market. Market presence. We also looked at the candidate providers scale in terms of installed base revenue, market share of new deals, and employee count. 5

7 Evaluated Providers Support At Least One Of The Four Subsegments Of B2B OM Forrester included seven vendors in the assessment: Apttus, Esker, IBM, Kenandy, Manhattan Associates, PROS, and SAP Hybris (see Figure 2). Each of these vendors: Has strong capabilities in at least one of the four subsegments of B2B OM. Enterprises B2B OMs needs differ depending on the breadth, depth, and diversity of their current application landscape, so we included vendors that specialize in one or two areas and do not try to support all four. Markets/sells that capability as a distinct B2B OM product to distributed companies. We excluded vendors that sell B2B OM functionality at a divisional level within an ecommerce or ERP platform but don t sell it as a standalone enterprisewide product. Has referenceable customers in several industries that involve physical products. We excluded vertical-specific solutions such as Pega s products for the communications industry and specialist subscription billing platforms such as Aria Systems and Zuora. FIGURE 2 Evaluated Vendors: Product Information Vendor name Apttus Esker IBM Kenandy Manhattan Associates PROS SAP Hybris Product name Apttus Order Management Order Processing IBM Order Management Kenandy Enterprise Order Management PROS Smart CPQ SAP Hybris Commerce Product version V Version Three Products Lead Overall; Others Excel In Specific Areas Each of the seven products that Forrester evaluated merits consideration by enterprises whose needs align with its strengths, even if it appears lower in the overall graphic than its broader competitors. Companies were rewarded in this evaluation for having a wide breadth of services, but all companies have value in specific areas. The vendor profiles section, below, describes those strengths in more detail. For AD&D leaders who have the broadest B2B OM needs, we found that (see Figure 3): 6

8 IBM, SAP Hybris, and Apttus lead in overall functionality. All three met most of our requirements across all of our criteria and have a strong B2B OM vision and strategy. IBM has been delivering B2B OM the longest and has the broadest capabilities and largest installed base. SAP Hybris Commerce is a leading solution for B2B companies that are most like B2C ones. Apttus is a good fit for enterprises with complex pricing, high service content, and where integration with Salesforce CRM is more important than with ecommerce. Manhattan Associates, Kenandy, PROS, and Esker excel in specific B2B OM areas. Manhattan Associates provides the most complete view of inventory to an order capture application, but it integrates with other applications for CPQ. PROS is the opposite: very strong in CPQ but weaker in execution. Esker focuses on order capture and visibility, with great functionality to enable low-end ecommerce flavors such as ed attachments and Internet file sharing. Kenandy is an emerging player across the entire B2B OM area, with particular strengths for digital and service businesses. FIGURE 3 The Forrester Wave : B2B Order Management, Q4 15 Challengers Contenders Strong Strong Performers Leaders Current offering Manhattan Associates Kenandy Esker IBM Apttus SAP Hybris PROS Go to Forrester.com to download the Forrester Wave tool for more detailed product evaluations, feature comparisons, and customizable rankings. Market presence Weak Weak Strategy Strong 7

9 FIGURE 3 The Forrester Wave : B2B Order Management, Q4 15 (Cont.) Forrester s Weighting Apttus Esker IBM Kenandy Manhattan Associates PROS SAP Hybris CURRENT OFFERING Capture Order status Distributed order allocation Execution orchestration Technology foundations 50% 30% 15% 20% 15% 20% STRATEGY Product strategy Corporate strategy 50% 70% 30% MARKET PRESENCE Installed base Market share of new deals Employees 0% 30% 40% 30% All scores are based on a scale of 0 (weak) to 5 (strong). Use The Downloadable Forrester Wave Model To Tailor Your Evaluation To Your Scope This evaluation of the B2B OM market is intended to be merely the starting point of your selection process. Our overall ranking assesses products capabilities across the four main elements of B2B OM, but many companies will only need a subset. The companies we classed as Strong Performers overall could be your best choice if you only need the functionality where they excel: Esker for order capture, Kenandy for order orchestration, Manhattan Associates for inventory visibility and allocation, and PROS for price optimization. We encourage clients to find the best-fit solution for their individual needs by tailoring the criteria weightings in the downloadable Excel tool. 8

10 Vendor Profiles Leaders IBM continues to have the broadest, deepest capability. IBM has the longest history in this space. 3 Its heritage is evident from the comprehensive functionality across all our Forrester Wave criteria. 4 IBM continues to develop its OM product for B2B and B2C scenarios. Some of its key differentiators are in the B2B-specific order types that stump ecommerce-focused platforms, such as multiphase installation services. The platform has proven reliability for the highest volume enterprises. The one relatively weak area is the rather dated user interface (UI), but this is IBM s top development priority. IBM is applying its design thinking process to all its commerce products, so we expect to see IBM Order Management catch up to (and even overtake) its peers in upcoming releases. Apttus delivers the most agile B2B OM solution. Apttus has added flexible order orchestration to its strong customer life-cycle management and CPQ foundation, all running on the Salesforce platform. It is particularly strong for enterprises with complex pricing, high service content, and where integration with customer relationship management is more important than with ecommerce. For instance, Apttus is a good fit for the growing number of capital equipment manufacturers shifting to managed service models. Some reference customers praised the UI, which is embedded in and indistinguishable from Salesforce, although some users might find it complex due to the number of fields and limited defaulting. Another possible concern is that the B2B OM functionality is relatively new compared with the CPQ modules. SAP Hybris leads for B2B companies that want B2C-grade omnichannel. SAP has built on Hybris s success in B2C ecommerce by extending it for many B2B needs. The UI benefits from its ecommerce roots in areas such as support for upselling and cross-selling by call-center customer service representatives. Its best fit is with B2B companies that are most like B2C, such as those with catalog-based transactional telesales and physical inventory in combined sales/distribution centers. Refreshingly, SAP s vision for Hybris embraces fragmented back-end landscapes. SAP wants to be the single enterprisewide platform for the entire customer journey, but it realizes that many of its customers either do not want that or cannot easily achieve it. Therefore it has designed SAP Hybris Commerce to help AD&D leaders quickly bring consistency to the front office in parallel with gradually simplifying the back office. Relatively weak areas include price optimization (although this is available from its partner Vendavo). Strong Performers Manhattan Associates excels in order allocation and execution. Its Enterprise Order Management platform is ideal for customers that want visibility across multiple inventory systems but do not want much change to their order capture systems. The platform integrates with customers order capture applications to provide them with complete visibility and optimized allocation of available stock. Other differentiators include the ability to see and allocate stock at 9

11 suppliers sites or in transit. Manhattan Associates enables omnichannel by allocating inventory (virtually, not physically) to different demand sources. This reduces the potential conflict of ecommerce selling an item that an in-store customer is about to buy, without causing shortages for one channel when another has a surplus of the same item. Manhattan relies on integration with other systems for some order capture services, such as pricing. Another relatively weak area is service-based business types. Kenandy is a Strong Performer in complex order orchestration. The vendor has built its Kenandy Cloud ERP product on the Salesforce platform and thereby offers usability, integration, and scalability beyond its own size. It is particularly strong where order fulfillment requires precise synchronization of multiple tasks (such as delivery, installation, and ongoing maintenance of expensive machinery). One reference customer is typical a manufacturer of medical scanners that is shifting to a per-scan managed service. Kenandy is a relatively young company it started up in 2010 but its leaders have an ambitious vision for a next-generation business application. Flexibility, usability, and optimization are core design principles. Kenandy s platform fits best at a divisional level; it does not yet have any customers that have connected one Kenandy instance with multiple back-end ERP instances. PROS is a pioneer and innovator in the revenue optimization parts of B2B OM. PROS brings advanced analytics and data science to pricing challenges such as maximizing sales margin from scarce capacity. It also offers excellent CPQ functionality, thanks to its 2014 acquisition of Cameleon Software, and supports complex pricing, promotions, and demand management within order capture. 5 For instance, a major car rental company uses PROS to optimize inventory reallocation, even to the extent of using discounts to encourage one-way rentals from locations with a surplus to those with a shortage. The vendor dominates the airline industry, with 19 of the top 25 using its solution to optimize pricing based on seat availability. PROS does not offer order allocation and orchestration, so its customers will have to integrate with their ERP instances to support those parts of the B2B OM journey. Esker is a Strong Performer in order capture and visibility. Esker tackles a different, but important, part of B2B OM than the other vendors in our evaluation. Its forte is management of the capture process, however the order enters your business. Fully automated parsing and analysis of electronic data interchange, fax, or orders combined with streamlined data entry aggregates orders from multiple channels into one central hub. Esker provides visibility, exception reporting, and complaint management so order managers can quickly rectify potential problems. Its problem resolution workflow enables users to document a complaint, such as a short or damaged delivery, and ensure that it is investigated and rectified. Because of this focus, Esker scores less well overall than the broader vendors; it is not trying to be a complete B2B OM platform. Its best fit is for companies that are happy to rely on their ERP instances for other B2B OM services such as pricing, ATP, and fulfillment. 10

12 Engage With An Analyst Gain greater confidence in your decisions by working with Forrester thought leaders to apply our research to your specific business and technology initiatives. Analyst Inquiry Ask a question related to our research; a Forrester analyst will help you put it into practice and take the next step. Schedule a 30-minute phone session with the analyst or opt for a response via . Learn more about inquiry, including tips for getting the most out of your discussion. Analyst Advisory Put research into practice with in-depth analysis of your specific business and technology challenges. Engagements include custom advisory calls, strategy days, workshops, speeches, and webinars. Learn about interactive advisory sessions and how we can support your initiatives. Supplemental Material Online Resource The online version of Figure 3 is an Excel-based vendor comparison tool that provides detailed product evaluations and customizable rankings. Data Sources Used In This Forrester Wave Forrester used a combination of three data sources to assess the strengths and weaknesses of each solution: Vendor surveys. Forrester surveyed vendors on their capabilities as they relate to the evaluation criteria. Once we analyzed the completed vendor surveys, we conducted vendor calls where necessary to gather details of vendor qualifications. Product demos. We asked vendors to conduct demonstrations of their product s functionality. We used findings from these product demos to validate details of each vendor s product capabilities. Customer reference calls. To validate product and vendor qualifications, Forrester also conducted reference calls, a total of 22 of the vendors current customers. 11

13 The Forrester Wave Methodology We conduct primary research to develop a list of vendors that meet our criteria to be evaluated in this market. From that initial pool of vendors, we then narrow our final list. We choose these vendors based on 1) product fit, 2) customer success, and 3) Forrester client demand. We eliminate vendors that have limited customer references and products that don t fit the scope of our evaluation. After examining past research, user need assessments, and vendor and expert interviews, we develop the initial evaluation criteria. To evaluate the vendors and their products against our set of criteria, we gather details of product qualifications through a combination of lab evaluations, questionnaires, demos, and/or discussions with client references. We send evaluations to the vendors for their review, and we adjust the evaluations to provide the most accurate view of vendor offerings and strategies. We set default weightings to reflect our analysis of the needs of large user companies and/or other scenarios as outlined in the Forrester Wave document and then score the vendors based on a clearly defined scale. These default weightings are intended only as a starting point, and we encourage readers to adapt the weightings to fit their individual needs through the Excel-based tool. The final scores generate the graphical depiction of the market based on current offering, strategy, and market presence. Forrester intends to update vendor evaluations regularly as product capabilities and vendor strategies evolve. For more information on the methodology that every Forrester Wave follows, go to Integrity Policy All of Forrester s research, including Forrester Wave evaluations, is conducted according to our Integrity Policy. For more information, go to Endnotes 1 Many AD&D leaders in B2B organizations face a diverse software portfolio, including customer-facing applications that vary by business unit and channel, and back-office platforms that differ by fulfillment method and product type. See the B2B Order Management Bridges The Gap Between B2B ecommerce And ERP Forrester report. 2 In Forrester s 88-criteria evaluation of B2B commerce suite vendors, we identified the eight most significant providers in the category CloudCraze, ebay Enterprise (Magento), Hybris (an SAP company), IBM, Insite Software, Intershop, NetSuite, and Oracle. See the The Forrester Wave : B2B Commerce Suites, Q Forrester report. 3 IBM acquired order management pioneer Sterling Commerce in 2010 to complement its ecommerce platform WebSphere Commerce Suite. Source: IBM Completes Acquisition of Sterling Commerce, IBM press release, August 27, 2010 ( 4 The Forrester Wave scores each vendor out of 5 for each criterion. For most criteria in this evaluation, a score of 5 means that the product demonstrated all the requirements we specified and also offers something exceptional that few of the other products have. A score of 4 usually indicates a strong product with some minor room for improvement; whereas a score of 3 means that the product misses one important capability. 5 Source: PROS Completes Acquisition of Cameleon Software, PROS press release, October 27, 2014 ( pros.com/company/news/pros-completes-acquisition-cameleon-software/). 12

14 We work with business and technology leaders to develop customer-obsessed strategies that drive growth. Products and Services Core research and tools Data and analytics Peer collaboration Analyst engagement Consulting Events Forrester s research and insights are tailored to your role and critical business initiatives. Roles We Serve Marketing & Strategy Professionals CMO B2B Marketing B2C Marketing Customer Experience Customer Insights ebusiness & Channel Strategy Technology Management Professionals CIO Application Development & Delivery Enterprise Architecture Infrastructure & Operations Security & Risk Sourcing & Vendor Management Technology Industry Professionals Analyst Relations Client support For information on hard-copy or electronic reprints, please contact Client Support at , , or clientsupport@forrester.com. We offer quantity discounts and special pricing for academic and nonprofit institutions. Forrester Research (Nasdaq: FORR) is one of the most influential research and advisory firms in the world. We work with business and technology leaders to develop customer-obsessed strategies that drive growth. Through proprietary research, data, custom consulting, exclusive executive peer groups, and events, the Forrester experience is about a singular and powerful purpose: to challenge the thinking of our clients to help them lead change in their organizations. For more information, visit forrester.com