IDC MarketScape IDC MarketScape: Worldwide Sales and Operations Planning 2016 Vendor Assessment Simon Ellis THIS IDC MARKETSCAPE EXCERPT FEATURES ORACLE IDC MARKETSCAPE FIGURE FIGURE 1 IDC MarketScape Worldwide Sales and Operations Planning Vendor Assessment Source: IDC, 2016 Please see the Appendix for detailed methodology, market definition, and scoring criteria. November 2016, IDC #US41890016e
IN THIS EXCERPT The content for this excerpt was taken directly from IDC MarketScape: Worldwide Sales and Operations Planning 2016 Vendor Assessment (Doc #US41890016). All or parts of the following sections are included in this excerpt: IDC Opinion, IDC MarketScape Vendor Inclusion Criteria, Essential Guidance, Vendor Summary Profile, Appendix and Learn More. Also included is Figure 1. IDC OPINION This IDC MarketScape is a quantitative and qualitative assessment that evaluates notable vendor software applications in the sales and operations planning (S&OP) marketplace and helps assess both current and anticipated future performance in the marketplace. This study assesses the business capability and business strategy of 10 vendors that offer notable S&OP tools to the marketplace. This evaluation is based on a comprehensive IDC framework and set of parameters identified to best evaluate and meet end-user requirements for S&OP. In detail: S&OP is a cross-functional, consensus planning process that turns business/market demand opportunities into a single, actionable operating plan by matching expected demand with available supply. Each vendor included in this IDC MarketScape offers an S&OP tool, either as standalone or as part of a supply chain planning platform, with deep functionality and notable customers. Although each of the 10 vendors offer slightly different capabilities, target different customer size ranges, and have direct experience across varied industry segments, all are notable providers that IDC would not hesitate to recommend as candidates for an S&OP evaluation. Although S&OP remains a strong offering from smaller best-of-breed providers owing to its "independent" nature, the benefits of an integrated platform are growing in importance. In this context, three of the 10 vendors in this study are enterprise ERP vendors, and the remainder are supply chain specialists. End users with one of those three ERP platforms may find the benefits of integration to exceed any functionality differences. The S&OP marketplace is characterized by both first-time buyers and replacement purchases (not including same vendor updates). IDC estimates that 75% of purchases come from companies that either did not previously have S&OP or had a homegrown tool, with the remainder being tool replacements. The criteria used in this IDC MarketScape for S&OP (and resulting vendor positions in Figure 1) are across the dual dimensions of strategy (future plans and where the vendor is headed) and capability (where the vendor is today in terms of capabilities). Each of the elements within strategy and capability is then assigned a weighting based on the relative importance of each criterion in the opinion of IDC Manufacturing Insights and feedback from manufacturing and retail users. This IDC MarketScape is a starting point for end users (i.e., manufacturers and retailers) that are considering an S&OP application. No research study will replace the due diligence that every company should do to assess how a tool meshes with the company's individual needs and circumstances, but this study does represent a "short list" a way to winnow down a longer list of application providers, both big and small, that exist in the marketplace. 2016 IDC #US41890016e 2
IDC MARKETSCAPE VENDOR INCLUSION CRITERIA Sales and operations planning is a popular software application area. There are many hundreds of vendors that offer S&OP functionality. For the purposes of this study, we invited only those vendors that offered robust and notable functionality (either as a dedicated tool or as part of a supply chain management platform) with a significant customer base: Vendor market share (e.g., represent at least 2% of this market) Vendor visibility (vendor is perceived as a key market player) Product capabilities (e.g., must have a specific feature) Product availability (e.g., product must have been available to buy for six months) Product installed base (product must have installed base greater than 25 users) Geography (must have product support in at least two regions) Although each of the 10 vendors evaluated meets this requirement, capability is deemed to be more important than absolute size. ESSENTIAL BUYER GUIDANCE Sales and operations planning is increasingly a critical element of a top-performing supply chain, yet it is often either ignored or poorly implemented at even large enterprise end-user companies. Many companies either do not have tools or use a homegrown application. S&OP is regularly cited in IDC surveys as a top priority for manufacturers and retailers. S&OP tools have improved dramatically in recent years, with many quality tools now available both on-premise and, increasingly, via the cloud. There is really no reason to continue to "limp" along with a homegrown or aging application. For companies looking to purchase or evaluate S&OP, we offer the following guidance: Clearly define business process requirements, in terms of both current capabilities and future plans. This is especially important relative to selecting application vendors and should include alignment between business process requirements and your existing application suite. Consider that although S&OP remains a strong offering from smaller best-of-breed providers owing to its "independent" nature, the benefits of an integrated platform are growing in importance. In this context, three of the 10 vendors in this study are enterprise ERP vendors, and the remainder are supply chain specialists. Consider S&OP functionality certainly but also be mindful of the benefits of integration against any functionality differences. Consider as part of your evaluation process that a few of the tools included in this study have been purpose built to support the core science of S&OP compared with others that have roots in adjacent disciplines like demand planning, supply planning, or financial planning. Individually, these "evolved" tools may have more mature functionality; but from a unified, purpose-built S&OP perspective, future innovations may be constrained. Ensure alignment between the line of business (LOB) and IT throughout the process of evaluating, mapping, and planning, it is critical to have key stakeholders from both LOB and IT. Such collaboration is done to ensure that both the business requirements are met and IT can support, maintain, and deliver a technology architecture that meets the needs of the business. This is particularly important with S&OP given its inherently cross-functional nature. Keep customization to a minimum customized workflows and systems add a layer of complexity into the supply chain, which impacts the ability to truly create an integrated 2016 IDC #US41890016e 3
approach to supply chain execution. It is important to keep a standardized approach, as much as possible, in order to enable processes and applications that interact seamlessly across the organization. Work with application vendors that meet your needs during the process of vendor selection for S&OP, seek out vendors that both meet the needs of your business today and have a future strategy that aligns well to your future vision. Also consider the direct experience that vendors may have in your particular industry segment. Talk with vendor references engage in discussions with references that have undergone similar efforts and leveraged the application vendors you are considering. Through discussions with companies that have undergone similar projects, you can both learn from their experiences and get a good sense of what it will be like working with prospective vendors. VENDOR SUMMARY PROFILES This section briefly explains IDC's key observations resulting in a vendor's position in the IDC MarketScape. While every vendor is evaluated against each of the criteria outlined in the Appendix, the description here provides a summary of the vendor's strengths and challenges. Oracle Oracle (NYSE: ORCL) is a public, global enterprise hardware, software, and services organization headquartered in Redwood Shores, California. Founded in 1977, Oracle has more than 132,000 employees worldwide. Oracle offers a mature S&OP Solution Demantra Real-Time Sales and Operations Planning (RTS&OP) with both deep functionality and a proven in-market track record. Currently at version 12.2.6, Oracle S&OP has been available since 2004 and covers all of the key business process areas such as consolidated demand and supply reviews, balancing supply/demand, and simulation/what-if scenario planning. The application offers embedded operational and executive analytics and reporting and has industry-specific functionality to support configure-to-order process, project-driven supply chains, service parts applications, and mixed mode manufacturing. S&OP is part of Oracle's comprehensive Value Chain Planning (VCP) suite of supply chain planning products that complement S&OP by enabling a seamless integration so that decisions can be driven into tactical demand and supply planning processes. Additional elements of the VCP suite include Advanced Planning Command Center (APCC) that provides integrated analytics dashboards in support of the S&OP process and the Demantra Trade Promotions Management solution that connects S&OP with the trade promotion process in consumer products industries and provides extended capabilities. Oracle's broader suite of applications also complement the S&OP solution: Agile Product Lifecycle Management links new product planning with the S&OP process, and Hyperion Financial Planning connects operational and financial planning. Oracle also offers complementary services, including: Oracle Cloud Services for VCP public and private cloud services Oracle Consulting Services VCP Practice for implementation and systems integration VCP Center of Excellence for solutioning and implementation support Oracle University for VCP customer training 2016 IDC #US41890016e 4
There are currently more than 350 customers worldwide using Oracle S&OP, spread across manufacturing segments that include automotive, farm, construction and industrial machinery, aerospace and defense, high tech, chemicals, and consumer products. The solution can be accessed via multiple user interfaces including web, mobile devices, and Excel download/upload. Customers can modify and create new worksheets, reports, and dashboards by adjusting elements such as overall layout, layout of hierarchy levels and data series in reports, graph types and colors, and exception criteria and color coding. Flexibility is key; no IT involvement is needed for configuration. There is no limit on the number of SKUs that can be managed. The largest number of SKUs currently used by a customer is in excess of 1 million. Similarly, there is no programmatic limit on the number of concurrent users. One large Oracle customer implementation supports over 85 billion annual transactions. Oracle has been experiencing good consistent growth of its S&OP product. Although the company does not disclose specific application area growth, it is the estimation of IDC that year-on-year growth for Oracle S&OP is around 15%. Much of this growth comes from existing demand management or supply planning customers, though Oracle is also able to win deals for S&OP as a standalone, best-ofbreed application. Future road map plans for the existing product include numerous self-initiated as well as customerdriven innovations including improved usability, improved mobility support, industry-specific functionality, performance enhancements leveraging in-memory computing advancements, improved IaaS support, and leveraging of numerous innovations in Oracle Database, middleware, business intelligence, and integration technologies for data and cache management, performance, and scalability. Features planned for a next-generation cloud S&OP solution include a new UI paradigm with embedded analytics, process management, guided problem-solving, social collaboration, rapid simulation, and aggregate planning. Strengths Positioned by IDC Manufacturing Insights as a Leader in this IDC MarketScape for the S&OP market, Oracle has been offering an application since 2004 and has plans to release a purpose-built, cloudbased next-generation product in 2017. Oracle's S&OP application does very well with the existing Oracle installed base, getting high marks for scalability, and the installed base has a very broad footprint. Oracle S&OP is also competitive as a best-of-breed tool. Key points of capability include: Scalability of the product with embedded, predefined analytics to meet all standard S&OP requirements Bundled with Oracle Advanced Planning Command Center for extended analytics where necessary The breadth and depth of complementary products Flexibility is key; no IT involvement is needed for configuration Scenario planning/simulation (in real time) Existing Oracle S&OP customers that we spoke with are generally happy with the tool and particularly happy with both its scalability and how it fits into the future road maps for the broader Oracle VCP suite of products. Certainly for the installed base of Oracle customers, Oracle's S&OP product is a very strong offering and may well be the best choice, given integration and broad capability coverage. 2016 IDC #US41890016e 5
Existing Oracle installed base customers do report relatively smooth implementations/integrations, customer support, and satisfaction with the product. Challenges Oracle is in the process of transitioning from a software company that sold primarily on-premise applications to one that sells primarily cloud-based applications. Transitions always make end users nervous, even if (as Oracle has done) support programs and maintenance remain firmly committed. In the spirit of "you can't please all of the people all the time," some cloud-resistant end users may find Oracle's cloud transition problematic, while others will say "what's taking so long." At IDC, we agree with the strategy to move to the cloud. Oracle's planned cloud S&OP is necessary for Oracle to "catch up" to other vendors that are already there and it must be a best-of-breed application once it does appear. APPENDIX Reading an IDC MarketScape Graph For the purposes of this analysis, IDC divided potential key measures for success into two primary categories: capabilities and strategies. Positioning on the y-axis reflects the vendor's current capabilities and menu of services and how well aligned the vendor is to customer needs. The capabilities category focuses on the capabilities of the company and product today, here and now. Under this category, IDC analysts will look at how well a vendor is building/delivering capabilities that enable it to execute its chosen strategy in the market. Positioning on the x-axis, or strategies axis, indicates how well the vendor's future strategy aligns with what customers will require in three to five years. The strategies category focuses on high-level decisions and underlying assumptions about offerings, customer segments, and business and go-to-market plans for the next three to five years. The size of the individual vendor markers in the IDC MarketScape represents the estimated market share of each individual vendor within the specific market segment being assessed. Sales and operations planning is a popular software application area. There are many hundreds of vendors that offer S&OP functionality. For the purposes of this study, we invited only those vendors that offered robust and notable functionality (either as a dedicated tool or as part of a supply chain management platform) with a significant customer base. IDC MarketScape Methodology IDC MarketScape criteria selection, weightings, and vendor scores represent well-researched IDC judgment about the market and specific vendors. IDC analysts tailor the range of standard characteristics by which vendors are measured through structured discussions, surveys, and interviews with market leaders, participants, and end users. Market weightings are based on user interviews, buyer surveys, and the input of a review board of IDC experts in each market. IDC analysts base individual vendor scores, and ultimately vendor positions on the IDC MarketScape, on detailed surveys and interviews with the vendors, publicly available information, and end-user experiences in an effort to provide an accurate and consistent assessment of each vendor's characteristics, behavior, and capability. 2016 IDC #US41890016e 6
Market Definition S&OP is a cross-functional, consensus planning process that turns business/market demand opportunities into a single, actionable operating plan by matching expected demand with available supply. Although many end users use the terms interchangeably, at IDC Manufacturing Insights, we view sales and operations planning and integrated business planning (IBP) as fundamentally different things. As illustrated in Figure 2, integrated business planning is the holistic business process that connects all the various planning functions across an entire organization to enable the alignment of operational and financial performance goals it encompasses supply chain/operational planning certainly but also product/innovation planning, marketing/campaign planning, customer/account planning, and financial/risk planning. The key, though, is that rather than these disparate planning efforts being done in isolation, they are done as part of a cohesive integrated whole. In the context of IBP, S&OP is the key orchestrating capability that sits on top of, and spans across, the demand, supply, and fulfillment capabilities of the business to ensure that a consensus plan is reached and that all constituents in the business are operating against a common set of targets. S&OP is a critical component of IBP, just like product planning, demand planning, or supply planning. Although we have considered how vendor S&OP tools interface with business processes like trade promotion management, this IDC MarketScape evaluates traditional S&OP functionality. LEARN MORE Related Research IDC FutureScape: Worldwide Supply Chain 2017 Predictions (IDC #US41863416, November 2016) Business Strategy: Closing the Loop Alignment and Integration Between Supply Chain Execution and Supply Chain Planning (IDC Manufacturing Insights #US41729916, September 2016) Business Strategy: Insights from the 2016 Supply Chain Survey (IDC Manufacturing Insights #US41553216, June 2016) IDC FutureScape: Worldwide Manufacturing Supply Chain 2016 Predictions (IDC #259782, November 2015) IDC PlanScape: Implementing a Rapid Integrated Business Planning Process as Part of a Next-Generation Supply Chain (IDC #257293, July 2015) 2016 IDC #US41890016e 7
Synopsis This IDC study is a quantitative and qualitative assessment that evaluates notable vendor software applications in the sales and operations planning (S&OP) marketplace and helps assess both current and anticipated future performance in the marketplace. This study assesses the capability and business strategy of 10 vendors that offer notable S&OP tools to the marketplace. This evaluation is based on a comprehensive IDC framework and set of parameters identified to best evaluate and meet end-user requirements for S&OP. "Sales and operations planning is a perennial hot topic among manufacturing and retail supply chain professionals in IDC surveys. It has become, for many of these businesses, the difference between an acceptably performing supply chain and a top-performing supply chain. As the supply chain grows in strategic performance, IDC strongly recommends that companies invest in a best-in-class S&OP tool," says Simon Ellis, program vice president for IDC Manufacturing Insights' Global Digital Supply Chain Networks and Planning Strategies research. 2016 IDC #US41890016e 8
About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make factbased decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Global Headquarters 5 Speen Street Framingham, MA 01701 USA 508.872.8200 Twitter: @IDC idc-community.com www.idc.com Copyright and Trademark Notice This IDC research document was published as part of an IDC continuous intelligence service, providing written research, analyst interactions, telebriefings, and conferences. Visit www.idc.com to learn more about IDC subscription and consulting services. To view a list of IDC offices worldwide, visit www.idc.com/offices. Please contact the IDC Hotline at 800.343.4952, ext. 7988 (or +1.508.988.7988) or sales@idc.com for information on applying the price of this document toward the purchase of an IDC service or for information on additional copies or web rights. IDC and IDC MarketScape are trademarks of International Data Group, Inc. Copyright 2016 IDC. Reproduction is forbidden unless authorized. All rights reserved.