MarketScope for Sales Force Automation in the Consumer Goods Industry Dale Hagemeyer
This MarketScope analyzes and rates the state of sales force automation in the consumer goods industry, as well as for each of the 15 vendors serving the market that meet our criteria.
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This document was revised on 24 December 2009. For more information, see the Corrections page on gartner.com.
Options for enabling the key field sales processes (category management, trade promotion management, volume planning, retail execution and settlement) have grown and matured during the past year. New vendor offerings have appeared, and leaders have increased capabilities in areas such as direct store delivery (DSD) as part of retail execution and also optimization/predictive capabilities in retail and promotion planning. The result is a stronger, more viable marketplace that can offer global as well as localized solutions to improve field sales execution.
MARKETSCOPE
Sales force automation (SFA) solutions are critical because of the amount of time and resources associated with executing with retailers. Investment in SFA solutions actually picked up in the latter part of 2009. However, investment has been primarily among consumables companies (such as food and beverage), with considerably less among semidurable companies (such as apparel, and footwear, and entertainment), and still less among durable companies (such as housewares, appliances and consumer electronics), where the economic downturn of recent months has been felt most. For years, we have expected the durable sector to get more involved in automating these processes; however, we see no catalyst for doing so on the horizon until the market shows substantial improvement. We see continued maturity in the market as evidenced by:
• Continued user uptake and live references for modeling and optimization by vendors such as CAS, DemandTec and Oracle.
• Vendors such as Xtel, Promax, RW3 Technologies and Quofore expanding to a more-global footprint.
• A variety of both on-premises and software as a service (SaaS) offerings in all aspects of field sales automation.
• New market entrants like Spring Wireless, with a mobile computing background, and DemandTec, with experience working with retailers.
• Far more new implementations by Tier 2 and Tier 3 companies than by Tier 1 firms.
• Only one vendor, Trimble Mobile Solutions, was removed from the MarketScope because of its failure to respond for a second year. We have spoken to several user companies that have experienced the same result, leading us to believe that Trimble is no longer active in consumer goods SFA.
This MarketScope analyzes the recent performance of the 15 vendors serving this market that meet our criteria, rating each vendor based on our vendor-rating definitions.
Market/Market Segment Description The market is being kept competitive and vibrant by new entrants with new approaches, by best-of-breed vendors pushing the cutting edge, and by suite vendors touting an end-to-end approach. All serve to balance each other and challenge the thinking of user organizations while putting
price pressure on the leaders. Last year, we commented about suite and ERP vendors being unwilling to improve interfaces or mobility. To their credit, some heeded our words and met that challenge. However, we're still waiting for far-reaching success stories of how service-oriented architectures (SOAs) have been used to pull a diverse band of best-of-breed solutions together as an alternative to suite offerings. We expect that it will take several years for this to happen.
Figure 1 shows the 15 major vendors serving this market and the solutions they offer. The figure focuses on the basic requirements; it is not a qualitative assessment.
Several of the vendors in various tiers are not covered in detail in this MarketScope because they do not meet the inclusion criteria. However, we continue to monitor their progress in the marketplace. In many cases, we find them quite interesting.
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• FlintFox offers hosted trade promotion management (TPM) plus related support services for deduction clearing and analysis for a QAD ERP installed base.
• NewsPage is a Singapore-based handheld retail execution play partnered with ITC Infotech that is gaining traction in India and southern Asia. The solution is basic, but very inexpensive.
• Promax is a TPM solution from Australia with predictive promotion simulation capabilities. It is making a push into Europe.
• TABS Group is an analytics company based in the U.S. that provides category management, promotion analytics and volume planning as adjuncts to TPM. The company provides not only tools, but a seasoned group of consultants that can help with the analysis.
• Upsell Commerce is a U.S.-based TPM vendor that morphed out of the defunct Kineticsware offering. It is based on Microsoft Dynamics with linkage to Microsoft Dynamics ERP, which could make it an end-to-end alternative to SAP or Oracle for small-to-midsize consumer goods (CG) organizations.
Gartner defines the tiers of user organizations as follows:
• Tier 1 companies tend to have a global presence and an annual revenue of more than $1 billion. Tier 1 companies may have affiliates in other countries that are considered as Tier 2 and/or Tier 3 based on their size and behavior in those local markets.
• Tier 2 companies have revenue between $250 million and $1 billion, or have operations based in specific countries that are part of a global company.
• Tier 3 companies have revenue of less than $250 million.
Inclusion and Exclusion Criteria Vendors must have at least $5 million in consumer goods SFA revenue from consumer goods customers, specific to one or more of the five key field sales processes, to be considered in this MarketScope. This overarching criterion automatically eliminates many startups.
Rating for Overall Market/Market Segment Overall Market Rating: Positive
Our outlook for this market continues to be "Positive," given the ongoing market penetration of these solutions across user organizations of all sizes and the maturity of offerings from multiple players. The various offerings continue to expand in expertise, but the market is still somewhat fragmented by solution type and tier (for example, TPM-only and retail-only solutions or TPM solutions that are focused on smaller CG companies). We still advise investment in SFA because it constitutes a means to a competitive advantage, particularly as CG companies evolve their capabilities from transactional to analytical to predictive/optimization and finally to optimized with a focus on more real time. We don't advise complacency, because what is required for a competitive advantage in 2009 won't last. This is particularly true as optimization and predictive modeling work their way into many of the five key processes. Other factors that contribute to our continued Positive rating are:
• More vendors expanding to become global as compared to last year, and user organizations making more global deployments. In some instances, large deployments
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utilize a single version and single back-end server as opposed to a regionalized approach.
• More ways to fulfill category management requirements from multiple vendors.
• Continued proliferation of both hosted and on-premises offerings across the key selling processes.
• More deployment options through vendors' professional service organizations, third-party integrators, or a combination of both.
• An increase in retail execution deployments as evidence that CG companies are getting a better handle on their trade promotions and now looking to improve in-store execution.
In order to become Strong Positive, the market will need:
• More investment from semidurable and durable CG manufacturers. We doubt that this will happen considering the current economic environment.
• More SOA success stories, which indicate the relative ease of combining various solutions, including best of breed.
• More global vendors that are able to better capture the unique requirements of markets such as Australia, Eastern Europe, southern Europe and Japan. Today, niche vendors in many of these markets have captured significant market share by understanding and providing appropriate solutions.
• Greater penetration of optimization and predictive modeling capabilities.
Evaluation Criteria
Table 1. Evaluation Criteria
Evaluation Criteria Comment Weighting
Geographic Strategy The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market. A vendor's quantity and quality of clients available to provide references from all three tiers of CG companies. This criterion also includes a vendor's ability to support these companies on many continents and in multiple languages.
High
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Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness. A vendor's demonstrated ability to implement on its own and through external service partners to deliver SFA solutions for CG companies.
High
Market Understanding Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen to and understand buyers' wants and needs, and can shape or enhance those with their added vision. An in-depth understanding of the CG industry and the needs of companies in this market segment for one or more of the five key SFA processes, coupled with the ability to act in real time. The ability to translate this market understanding into comprehensive functionality and meet customer needs worldwide.
High
Offering (Product) Strategy The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements. Web and mobile technology that is scalable and can support internal sales agents and partner sales agents. The data model can support hierarchies of customers and products — for example, product family, brand and stock-keeping unit. The product also supports multiple platforms, such as PDAs, laptops, tablet and ultralight PCs. The vendor's technology can be expanded to integrate with other company legacy solutions, best-of-breed offerings or syndicated data sources.
High
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Overall Viability (Business Unit, Financial, Strategy, Organization)
Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization's portfolio of products. A vendor's ability to generate sustainable revenue and profits, and its commitment to continued success in this specific SFA marketplace. Vendors must have at least $5 million in SFA revenue based on CG to be considered in our MarketScope. We also emphasize financial transparency, regardless of vendor size.
Standard
Product/Service The vendor's ability to enable one or more of the five key sales functions with a complete solution that meets market requirements for that sales function. Also the ability, where applicable, to tailor the solution to meet unique user requirements.
High
Vertical/Industry Strategy The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets. A vendor's breadth, depth and vision for one or more of the five key sales processes that support SFA for CG. This criterion also includes important enablers, such as order and data management, content management, contract management, reporting and analysis.
High
Source: Gartner (December 2009)
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Vendor Product/Service Analysis Adesso Solutions Adesso Solutions remains true to its mission of providing low-cost TPM solutions to Tier 2 and Tier 3 CG companies. The majority of existing as well as new clients are SaaS, but Adesso can also deliver on-premises. Some recent deployments are for enterprise licenses, which is in sync with how some providers are delivering their solutions. We stated in last year's MarketScope that integration of the Gelco capabilities would be complete by 2009, but we have found that some modules will not be integrated until 2010. Therefore, user organizations should understand this path and how further delays may affect them.
Adesso is unique and compelling in that it has long-standing capabilities regarding issuing checks for unsaleables or as direct pay to retailers such as convenience stores. It also has capabilities in food services from a single platform, which bodes well for CG companies that sell through both channels. It doesn't have promotion optimization yet, but we believe the company is moving in that direction. Adesso is also one of the lower total cost of ownership (TCO) solutions on the market based on information from our clients.
The limitations of Adesso are its focus on North America and lack of offline capabilities. Its analytical capabilities are average, but we believe they will improve after all integration activities are completed and Adesso can put more effort into the Microsoft analytical capabilities that were acquired last year. Our rating is for TPM functionality only, and remains unchanged from last year because the company has brought very little to the market that is new, focusing instead on integrating its previously acquired Gelco capabilities.
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Evaluate Adesso when: You are seeking a stand-alone TPM solution that is hosted or possibly on-premises with minimal customization, your focus is on the U.S./U.K./Canadian markets and analytical requirements are modest.
Rating: Promising
alqemyiQ alqemyiQ (formerly Kenosia) has made major changes in the past year by moving to the Boston area; investing in people and product as the bankruptcy of its parent company, Halo Technologies, winds down; and adjusting its vision beyond category management into broader consumer datasets. The company's vision is to leverage some of the advanced datasets being spun out of electronic couponing, loyalty programs and demand-signal data to be more linked to the consumer and more compelling to the retail customer. This also means:
• A new architecture based on XML, and no more proprietary components. Also, an open architecture that lends itself to partnering.
• A wizard-driven approach to analysis and report writing.
• The same presentation layer, but different plumbing to be more responsive and scalable.
• More understanding of user access and better access control.
• Becoming a competitor in demand signal data processing.
Client organizations seem supportive. Much of this customer support is driven by loyalty and a desire to see more innovation than the few new buttons or features in the releases that have come out in the past several years.
alqemyiQ will continue to support existing clients, but migrate them over to the new platform once it is proven. This will require consistent execution and focus to chase its vision while supporting existing clients. However, we see this vision becoming aligned with the direction of the market — specifically, where more real-time analysis and offers can be made to shoppers and where both retailers and manufacturers have to be truly collaborative and transparent. Because alqemyIQ has an existing customer base that has seen few defections during the troublesome Halo years, as well as a unique vision, we have upgraded its rating to Promising.
Evaluate alqemyIQ when: You need analytical functionality for category management, but also share a vision for interacting with consumers at the store level. Existing users can take solace in the fact that the company once again has vision, but prospective user organizations must consider the substantial challenges ahead.
Rating: Promising
CAS CAS has been able to offer new levels of innovation with the release of CAS 8.0, which includes an improved user experience utilizing Microsoft Silverlight. Here are a few highlights:
• Asynchronous processes to optimize performance while multitasking. This allows the user to see less of the annoying hourglass while performing one function, while going straight into another while it completes.
• Full launch of trade promotion optimization. The product is already live in several client organizations but this reflects the actual productization of this solution that does baseline
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and promoted volume simulation, predictive promotion simulation (what-if simulation for an individual promotion), promotion optimization (constraint-based optimization for a single promotion) and promotion plan optimization (constraint-based optimization for a series of promotions).
• Single-screen planning to avoid toggling back and forth.
• A rule-based engine to suggest order quantity based on prior-period order quantities.
• Better configurability by replacing Rational Rose with Silverlight. This, combined with configuration options and tools, will also enable easier and lower-cost deployments through partners.
• Configurable process guides embedded in the user interface to help the user navigate the entire process, provide check marks for processes that are complete and help users see where they are in the process at any time.
• New navigation in the retail execution application to allow for all planning activities to be done on a single screen. Route optimization has been enhanced in the application to include capabilities such as call clustering and corridor search with optimization between the selected locations.
• More capabilities on the handheld with a Wide Video Graphics Array (WVGA) format for a new smartphone, larger buttons and one-step camera integration, so that a photo taken in a store location automatically appends to that location.
• More visualization and analysis to be able to show more to the store manager.
In addition to superior innovation over the past decade, CAS differentiates itself with excellent subject matter expertise and a global presence. It seems to be a lightning rod for talented people who often leave other vendors to become part of this leader in innovation. But despite great levels of innovation, there has been slippage in execution and client retention, primarily in the U.S. market. CAS has taken steps to address these issues, but there is still some client frustration. To maintain the highest rating, we hold CAS to the highest standard. This isn't to say that CAS has significant issues, but as a market leader its level of execution must mirror its level of innovation. Therefore, it will have to:
• Evaluate its exclusive focus on Tier 1 companies in the U.S. market despite pursuing Tier 2 and Tier 3 companies elsewhere. CAS either hasn't moved into Tier 2 and Tier 3 because it believes that Tier 1 still offers significant opportunities or else it hasn't figured out how to offer its solution as SaaS to be appealing to those markets. In either case, we believe that it is missing out on significant opportunities.
• Improve client retention and support where clients have experienced implementation or support issues and subsequently opted in favor of other vendors instead of upgrading.
• Staying adequately plugged into user organizations after deployment. Some user organizations we have spoken to don't even remember why CAS was selected or who was involved in the selection. As a result, they have moved to other solutions.
Evaluate CAS when: You prefer Microsoft-centric solutions, don't require a SaaS option, seek competitive advantage through advanced analytics and predictive modeling, favor a superior user interface, and are looking for a vendor that constantly pushes the boundaries of innovation.
Rating: Strong Positive
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Coheris Coheris is a new addition to the MarketScope, having met the inclusion requirements after FDV Concept was acquired by Coheris several years ago. The Coheris solution has functionality for both headquarters and in-store selling. The headquarters functionally has an appealing interface and two differentiators: the ability to manage pricing within the application without being fed by an ERP system and an approach to sales forecasting that is more simple and intuitive than the standard "grid" approach. Additionally, the shelf simulation capabilities are outstanding. This means not only creating and viewing planograms, but also manipulating and optimizing them within the SFA solution. As an example, with one click a user can expand a shelf set from five meters to six or see the shelf in three dimensions. Having these capabilities in the hands of field sales personnel should be high impact at the point of decision making.
Coheris has recently started winning deals outside of the European continent, including the U.S., Canada, the U.K., Ireland and Australia. We wouldn't call its interface best-in-class, but it relevant enough to win deals against suite and ERP vendors. To get more RFPs, Coheris is looking to create a network of service providers. At present, this remains a minor obstacle to getting more RFPs, but as it expands outside of France and adjoining countries with partners its visibility will increase. Being a Microsoft Gold Certified Partner will also help it to grow successfully by incorporating Microsoft components while focusing on industry functionality. Coheris uses the Microsoft stack with .NET for the development environment, and Analysis Services and SQL on the back end. Future directions also include importing the demand data point-of-service (POS) cubes that it already has to drive merchandising activities in mobile solutions. This is good vision and, if executed well, will give Coheris the ability to optimize activities at the store level, which is consistent with where Gartner sees the market going.
Evaluate Coheris when: You have substantial business interests in, or are Europe-centric as a company, you value shelf simulation and optimization and having price management on the mobile device, and seek elements of predictive analytics in the selling process.
Rating: Promising
DemandTec DemandTec qualifies for the MarketScope for the first time based on its TPM capabilities. The reality is that DemandTec has been doing predictive modeling for trade promotions for some time, and has consistently added more and more functionality such that the line between becoming a TPM solution is blurred. The DemandTec Trade Planning & Optimization solution only requires some TPM solution of record as a starting point for the funding amounts, promotion types and target volumes. From there, the DemandTec solution does simulation and allocation, sets the accruals, manages the deals, and handles the settlement. We believe that DemandTec should add the remaining functionality and fully call itself a TPM solution. At present, it is often placed on top of SAP to improve the predictive analytics. Declaring itself as a full-blown TPM solution may possibly hinder the SAP relationship, where SAP routinely brings DemandTec into deals to show that it has some semblance of predictive analytics. However, at some point, SAP will have something of its own and push away from DemandTec. Therefore, DemandTec should declare itself now rather than wait.
Because of its market cap of approximately $250 million, DemandTec is also able to attract the attention of integration partners like IBM, Booz & Company and Accenture. This automatically gives it an advantage over smaller TPM players. Nevertheless, DemandTec could be added on top of a smaller player where no optimization capabilities exist. It is noteworthy that DemandTec is delivered on a SaaS platform.
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The Deal Management solution on the DemandTec TradePoint Network is the veritable clearinghouse for the details related to deals among manufacturers and retailers. We do see it as an enabler to promotions running more smoothly from setup to execution and an added advantage to DemandTec. This clearinghouse grows each year, but even if a manufacturer doesn't participate it can still benefit from the optimization capabilities of the TPM offering.
The actual DemandTec application is not elegant, but it is suitable. We would say its usability is on par with the average TPM solution. Given time and a desire to be a complete TPM solution as opposed to an analytics play, we believe that the interface can be improved to have more of a "software" look and feel as opposed to business intelligence (BI).
Given the strength of the company, its growing footprint with leading manufacturers, existing footprint with retailers, ability to optimize promotions as an add-on to TPM, and partner support, we rate it as Promising.
Evaluate DemandTec when: You see the merits of the predictive capabilities of TPM but your current vendor has no road map for TPM; in particular, SAP, since DemandTec has done considerable work on top of SAP. Also, evaluate DemandTec if your key retail partners are participating in the TradePoint clearinghouse.
Rating: Promising
Interactive Edge Interactive Edge continues with a market-leading solution that should be increasingly interesting to CG companies as they get control of their issues in trade promotions/retail execution, and realize the value of automated data loads, industry-specific analytics and superior presentation graphics. Organizations that use the XP3 solution are among the most positive references we know. It is interesting that the solution is used beyond category management, even for forecasting or where data loading and manipulation are required.
For 2010, Interactive Edge is working on the development of a SaaS cloud-computing data warehousing offering. It also has a front end add-on to Aldata's Apollo space management where it provides the visualization of shelf sets and display configurations, but the main advantage is flexibility and data access combined with more recommendation and usability. We also see more movement into consumer durable and semidurables, which is consistent with the trends of other leading vendors in their respective spaces and featured herein.
Interactive Edge is highly Microsoft-centric from .NET to Analysis Services, and now supports Microsoft SQL 2008 and Vista. Interactive Edge is also SAP NetWeaver BI-certified and has a relationship with SAP to create, distribute and apply analytics in more-dynamic Microsoft PowerPoint presentations. Our rating is for category management functionality only.
Evaluate Interactive Edge when: You need data analysis tools that have industry best practices baked in and aren't inclined to build them from scratch or from nonindustry BI platforms. You have power users as well as corporate/key customer team settings or one-person account managers. You want to obtain insights and recommendations through analysis and be able to share them in compelling visual form.
Rating: Positive
MEI MEI continues to establish itself as a player in the SaaS-specific TPM market for Tier 2 and Tier 3 companies with consistent performance, client acquisition, stable management and customer
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support. We believe that its viability will continue to increase over time. In 2009, the following occurred:
• A relationship with Rackspace to enhance hosting and flexibility while reducing cost
• A move toward being SAS 70-compliant for processes in 2010
• An increase in focus on Tier 3 companies where less product complexity and a lower price point are critical
• Renewed emphasis on usability to keep up with market requirements
• Expanded sales and customer management personnel and forging relationships with external service providers
• A move to rearchitect the system to take advantage of multitenant hosting and cloud integration
Current efforts to upgrade its code base are a good thing for MEI because approximately four years ago, MEI technical personnel made decisions that ultimately limited the flexibility of the solution. Much of this has been subsequently mitigated, but an upgrade is warranted now that there are more technology options available to facilitate reporting from within the application, capture more industry/geography-specific requirements, and work toward greater mobility. Becoming a SaaS provider of TPM had been a good thing for MEI based on its legacy, but the upgrade will hopefully pave the way for more product differentiation. MEI offers a complete TPM solution. It also has partnerships with M-Factor for market mix modeling and TABS Group for deeper analytics. These are good strategic relationships, but we would like to see more combined successes. MEI should also focus on improving usability to stay on par with the market, seek implementation partners, and embed more-user-specific and geographic configuration capabilities into its solution. Once it does, it will have a better and more cost-effective solution based on newer technologies. We see MEI as Promising based on the progress it has made and will watch to see how it rises to the challenges of rearchitecting.
Evaluate MEI when: You seek a hosted TPM solution with no customization requirements, prefer using Microsoft Excel as a front-end and offline tool, have no international expansion plans, do not presently require offline capabilities beyond the Excel add-in feature (Frontline Planner), and seek a complete solution that offers value over "bells and whistles."
Rating: Promising
Oracle Oracle continues to improve both its execution and product. As a result, it has improved client retention and satisfaction. In the case of execution, Oracle continues to work with existing clients in various forums as well as one-on-one to ensure capture of ongoing requirements and issue resolution. It also has made adaptations to its solutions for various geographies such as Europe and Australia with more out-of-the box offerings. We believe this will strengthen its presence globally. Oracle also has a complete offering in direct store delivery (DSD) and van sales but simply needs a chance to demonstrate this with more user acceptance. The Oracle installed base in CG is very broad across the various subindustries, such as food, beverage, adult beverage, household products, durables, footwear and apparel, and consumer electronics. The Integrated Sales and Marketing suite is not only appealing to Oracle ERP users but it is important to note the multiple cases where SAP back-office users are upgrading to the latest Oracle solutions and not switching to SAP. Furthermore, we know of no instances where the inverse is true with SAP fronting an Oracle ERP for any of the functionalities covered in this MarketScope.
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Oracle is steadily improving its user interface both on the handheld and PC. We believe that after being stagnant for the past two to three years, the new release will be more appealing to users because of better interface and functionality. Some recent improvements include:
• A single planning scenario on a single screen without feeling crowded
• Predictive trade planning based on more factors or where there is insufficient history
• A demand signal management offering, which, while not part of the scope of this analysis, will improve execution in sales and supply chain
• More depth in the account manager and power user roles so that the former can execute completely within Oracle while the latter can work directly in the Demantra portion of the solution to perform more scenarios
Oracle now has two clients live on its Comprehensive Trade Management solution, one in the U.S. and the other in Australia. Both include generating baseline and promoted values and simulation, and in one case can simulate cannibalization and halo effects. Because both clients are referenceable, we believe that Oracle joins CAS in being at least two years ahead of other vendors that are just thinking about or formulating their predictive/optimization offerings for TPM.
Evaluate Oracle when: You want best-in-class or near to that in both TPM and retail execution, plus the benefit of an integrated demand signal capability. You have gotten over the fact that Oracle does indeed have an ERP solution and database products, but that evaluating its field sales capabilities doesn't make you a traitor to your other incumbents. Finally, if you do use Oracle in the back office and want to be able to link demand creation to demand fulfillment with predictive modeling capabilities, Oracle can deliver solutions that can dramatically improve outcomes.
Rating: Strong Positive
Quofore Quofore is the new name for O4. The company is taking a leadership position in the global retail execution space with merchandising, DSD and van sales capabilities. It now has more than 60 clients of varying sizes in 20 countries and 15 languages. It has achieved this because it moved quickly to establish a global presence and offer flexible and intuitive solutions on handheld devices while the giant vendors did battle in the TPM space.
Quofore has the deepest functionality for DSD of any vendor we've seen. This means capabilities like vehicle inspections and service reports, branching login and prompting, DEX capabilities (used to pull order data directly from an individual store) and having photos taken while at a store location automatically append to that store visit. It is also a very flexible solution with configuration consisting of checking a series of boxes to have the changes pushed out to the users on the next sync session or else remain part of the individual user's unique configuration.
Other noteworthy Quofore capabilities include:
• Route optimization (through partner relationships), which shows best route as well as how long to travel between points
• Rapid deployments in as little as 90 days
• Support for various device types such as smartphone, tablet PC, laptop and Web-only
• Multiple user profiles for merchandising, presales and DSD functions
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Because of Quofore's diverse user base spanning many consumer goods subverticals, recent capital infusion of $15 million, global reach, strength of management team, high degree of client satisfaction, and partner network, we increase its rating to Strong Positive.
Evaluate Quofore when: You place a priority on functionality and analytics on a handheld, with the possibility to deploy globally across DSD, merchandising and order entry. Also, evaluate Quofore if you like the option of hosted or on-premises, and have a preference for Microsoft technology.
Rating: Strong Positive
RW3 Technologies The RW3 approach continues to be one of going very deep with its clients with not only retail merchandising solutions but also outsourced analytics and POS data management. Its strengths still lie in the depth of merchandising profiles that it enables. These include validating contract compliance, business-to-business (B2B) selling to distributors and wholesalers, and van selling, including reconciliation of cash received and product sold; Universal Product Code scanner integration to speed input and reduce navigation; Global Positioning System (GPS) integration to help representatives understand where they are and where they are going; initiating check payments to retailers; inventory management; and asset management (like racks and display modules). Because it has this depth, it is best-in-class in merchandising across all in-store activity types for grocery retailers, convenience stores, newsstands, mass merchants, kiosks and airport retailers.
RW3 has an unprecedented level of client retention. It is somewhat of a lifestyle company that doesn't seek massive growth but at the same time differentiates itself by how it serves existing clients, often playing a deeper role with each as time passes.
Similarly, the breadth of roles and activities covered includes many that are not offered elsewhere, such as "work with" functionality for managers to evaluate sales representative proficiency, in-store shelf assembly including parts and time-sheet management, and spotting and understanding instances when the product isn't scanning, as well as capturing steps being taken to fix the out-of-stock situation. This includes quantifying what is normally scanned to determine the magnitude of the out-of-stock to prioritize what is to be done and to indicate what activities have been performed to attempt to remedy the problem. RW3 continues to provide value to clients in resolving the "phantom inventory" problem using a combination of data and human assets. This results in better product availability where systems aren't replenishing because they believe there is product on hand.
In addition to the focus on execution efforts and working to derive insights from in-store activities and POS data, RW3's solution processes internally rather than relying on a partner, using analysis services delivered in Excel reports and pivot tables. The POS data drives the activities that need to be executed in the retail outlets.
RW3 is Microsoft-centric, which helps with Outlook and Excel integration to quickly capture market requirements and put them into reports for delivery to the client. RW3 continues to look toward expansion into Europe after having established technical relationships with partners in Chennai, India; and Nizhny Novgorod, Russia.
Evaluate RW3 when: You are looking for deep merchandising functionality with the ability to capture insights and analytics. Moreover, you prefer a hosted solution, value analytical capabilities and don't require DSD functionality.
Rating: Positive
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SAP SAP has an excellent strategic vision of providing an end-to-end solution from demand creation to demand fulfillment with largely organically grown components. We applaud this strategy and see it as valuable to user organizations once fully executed. SAP made some improvements to its TPM product this year but largely neglected handheld capabilities for in-store execution. A pending relationship with Sybase may address this, but it is too early to tell. The advances in TPM include usability and some deep-if-not-unique functionality for complex accrual programs with more real-time updates of their status. In particular, we liked the BusinessObjects Xcelsius Enterprise dashboard, which features excellent visual simulation using sliders for a better understanding of promotional outcomes such as sales volume, margin and profit. Existing SAP customers considering such solutions should take a good look at this capability because it is already embedded in the SAP suite and is a real plus. This is a good example of leveraging the ERP system in an end-to-end approach that adds analytical capabilities to improve the value of the underlying business process.
Despite the upgrades in the interface, our assessment is that it looks and feels like best-of-breed did a couple of years back. The wizard/guided approach to setting up a promotion had a nice feel but requires a significant number of screens to actually set one up. Our discussions with users have yielded mixed results about usability. It is probably too early to tell about "user delight," because many deployments we are monitoring are still moving up the learning curve. We will continue to watch user uptake and satisfaction during the next year. IT folks, however, seem delighted to have all the stack with one vendor. Users of prior versions of the TPM solution continue to give us some of the worst evaluations of any vendor for whom we checked references in conjunction with this report. What we hear is that the tools are hard to work with and that the users perceive the feedback they provide is often not acted on. The new solution and interface will address some of this, but we are eager to see how SAP responds to feedback and client issues during the next year
We don't expect SAP to have any predictive or optimization capabilities soon, because during our review there was no definitive time frame for adding predictive capabilities. The few prospective TPM purchasers that still run ERP version 4.6C or prior versions should note that integration will take considerable effort, so act accordingly. Those on ECC 6.0 will find this to be the best scenario for ease of integration. Moreover, the complete ability to execute a trade promotion also relies on having Business Warehouse.
SAP also needs to change its pricing model for TPM. Charging for CRM licenses and a variable amount for the TPM Engine based on the revenue of the user organization is not consistent with how the rest of the market prices these solutions. It defies the concept of leverage of an application if the cost is tied to corporate revenue. In the past, when SAP was giving its TPM solutions away to get an installed base or as inducement to codevelop, this pricing structure didn't grate on the users. But for many years, the market has been telling SAP to change the pricing structure away from a "tax on company revenue," but it has not listened.
We have seen more users go live on the new versions of TPM, but given the many deployments that are still in progress and the weakness of the retail execution and monitoring offerings, we continue to rate SAP as Promising.
Evaluate SAP when: Having the end-to-end process from one vendor is more important than usability, predictive capabilities, good expertise on handhelds, or giving users leading-edge tools.
Rating: Promising
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Spring Wireless For several years now, Spring Wireless has been moving around the globe doing retail execution and DSD projects for leading CG companies, but often in out-of-the-way places. In 2009, it not only broke $100 million in total company revenue but also made inroads into the U.S. market by landing a deal with a major beverage bottler. The company is headquartered in Sao Paulo, Brazil, but has offices across the Americas, Europe and Asia. Total head count is said to about 600, with 22% of those employees in R&D.
Basically, Spring is a wireless platform that has moved into industry applications. By platform we mean that it could enable a number of mobile capabilities, from wrapping itself around an existing CRM solution and making it mobile, to field service, to retail execution, to phone marketing and beyond. Spring seeks to handle all the mobile wireless dimensions for an enterprise. Since mobility is important in the marketplace, this has allowed Spring to achieve growth between 20% and 30% in each of the past two years.
Spring will become formidable around the globe in the next two to three years for several reasons:
• Big players like SAP have neglected this space and left it open.
• Many smaller players offer only a single application or else are highly regionalized.
• Spring isn't just a relatively low-cost provider by having operations in some attractive countries, but most of its operations are so positioned — from its headquarters (Brazil) and beyond.
• Spring has relationships with big CG companies abroad (five out of the top five in food, four out of the top five in personal products, two out of the top five in tobacco, and two of the largest in global beverages) and is leveraging these relationships abroad to get access to the home office. For many years, the CG home office has pushed applications out to the affiliates and was met with resistance. Now, the resistance is working its way to the home office.
• The majority of instances are already on SaaS, but can also be obtained as on-premises. Hence, Spring is already in step with the market and able to go both ways.
• It is full-featured, with pricing engines, master data capabilities, mobile payment options, planograms, net-change-based synchronization and some analytics on the mobile device.
• As a platform play, these solutions are highly configurable. That's what they excel at. They incorporate modern architectures that require checking a few boxes, changing a few naming conventions and dragging a few buttons around to move to a new market. And they can do it without expensive third-party support or writing code.
The challenge that Spring will encounter in the short run is that its solutions lack the sizzle as well as the specific functionality that sells well in North America. Our review of its retail execution solution highlighted a lack of knowledge of the terms and process flows for retail in North America. However, with the resources it has, a client base that is willing to provide instruction, and the flexibility of its application, Spring will close the gaps quickly.
Evaluate Spring Wireless when: You are looking for mobility across multiple business functions, are willing to share some of the finer points of what you require, want something as big as global or as small as very local, and have multiple mobile requirements.
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StayinFront In 2009, StayinFront was primarily focused on expanding existing relationships in the U.S., but also busy working on new capabilities. This includes more functionality, such as drafts and rebates, as well as deepening functionality in DSD. It is also expanding its partner network locations such as Spain and South Korea in anticipation of an improved economy and more global deals. StayinFront has a good interface based on Microsoft technology and has proved to be scalable, with good performance with sales forces in the thousands. Configurability is high by simply checking a few boxes. It is best positioned at present for merchandising due to constant enhancements being made in conjunction with Advantage Sales and Marketing, a leading sales agency in the U.S. market. StayinFront will need to fully commit to DSD with complete functionality to compete for these DSD opportunities.
A bright spot is the release 12.0, which has more configurability at the user level, an improved interface with the increasingly popular "tachometer" format, and more Outlook integration to communicate either through e-mail or entirely within the CRM system. The handheld, based on Windows Mobile, will also see improvements, with more analytics on the device, and with HTML being pushed out to the device, along with "push reports" that require no manipulation and do not burden the communication infrastructure.
The challenge for StayinFront is that it will need to move into the vanguard in both merchandising and DSD to be recognized as a leader. It is near best-in-class in merchandising, but will need to do more in areas such as route and activity optimization to be positioned as a leader in developed countries. It is also advancing in DSD, so getting clients live on DEX capabilities will be a plus for it in the U.S. market. Being perceived as a leader is critical because user organizations are either leaning to the cutting edge or else choosing combination TPM/retail execution. Nevertheless, with release 12.0 bringing news to the offering, and a diverse range of support services available to users, StayinFront is worth a look — especially for global situations.
Evaluate StayinFront when: You favor a flexible solution from a global player that has been enabling mobile sales processes for more than a decade, has a close relationship with a leading U.S. sales agency, and has put a lot of effort into enhancing usability for working mobile.
Rating: Positive
Synectics Group Synectics Group has upped the stakes in recent weeks with a trade promotion optimization solution that combines the capabilities of Information Research International for lift tables and River Logic for predictive modeling. In fact, Synectics has the distinction of offering the first true "optimization" solution. Others have the ability to run predictive scenarios but do not yet have the ability to set some constraints around timing, frequency, duration, tactics and pricing, nor do they have the system to find the best combination. It can also start at a higher level of granularity and help with the development of a national/regional plans before getting retailer-specific. We applaud the fact that Synectics and partners have invested the resources in a solution as opposed to looking for a company that is willing to foot the bill for development. What is also interesting is that Synectics and River Logic solutions can be decoupled to work in concert with another TPM solution. It may be a challenge for the usual Synectics user organizations (Tier 2 and Tier 3 CG companies) to move to predictive trade promotion, when this is largely the realm of larger companies today. Nevertheless, we will watch this eagerly because the optimization is actually quite simple. We believe that a user can be trained in a couple of hours, but Tier 2 and Tier 3 CG companies will need to get the vision of how optimization can help them despite their relatively small stature in the market
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Beyond its optimization capabilities, Synectics offers proven TPM functionality and company expertise. The functionality is good and the analytics are among the best available. The new .NET version called 7.0 is selling and companies are upgrading after seemingly waiting for a long time because they were happier with the previous version — which we found very strange. This may be because Synectics is a family owned/lifestyle company without any forced migration program.
Synectics gives users hosted TPM without a lot of frills, as well as deep expertise and support from the company. Synectics is limited to North America and only offers TPM. Because Synectics has a proven solution, industry expertise and now offers true optimization, we rate it as Positive.
Evaluate Synectics Group when: You are a Tier 2 or Tier 3 CG company with no global aspirations and no DSD or retail execution requirements. You place a great emphasis on a vendor with expertise that acts more like family than vendor, and seek TPM and optimization competencies through a vendor partnership as opposed to a purely software solution.
Rating: Positive
Xtel Xtel continues to have a virtual lock on the southern European market because of its high degree of specialization and excellent user experience in a market that other vendors have overlooked. Xtel is a privately held company based in Bologna, Italy, that is expanding across Europe after opening offices in France and Spain in 2009. This seems to be the pattern that other European players have followed to get a broader foothold. We expect that Xtel will see more Pan-European success in 2010. Also new for 2009 is more partnering with regional as well as global integration partners. This will help as Xtel adapts to local environments and bolsters its ranks for deployments.
The company has a suite that covers sales performance management, customer planning, trade promotion management, pricing management, volume planning, retail execution and monitoring, settlement, and quota/incentive management. The Xtel offering has excellent simulation and graphics that use a color-coded tachometer metaphor for measuring everything from lift to customer profitability; this tachometer metaphor is the most innovative we've seen. The customer profitability calculations are done on the fly and include a full waterfall profit-and-loss capability. There are also predictive capabilities in the form of regression analysis to simulate outcomes. Role-based views include brand manager, sales manager and salesperson. New for 2009 is the ability to perform predictive scenarios across the entire suite, including quotas, incentives, promotions and retail activities. This is highly visionary and should increase the relevance of Xtel on the global stage.
For 2010, Xtel, never being content with an excellent user interface, will redesign it for an even better user experience and for pushing more functionality through PDAs and smartphones. It will also be working more with demand data. It may well be that Xtel is the first vendor to offer totally optimized retail activities from routing to step-by-step guidance by store based on POS data.
Xtel is also showing more relevance in the market by using a recent influx of capital to invest in people as well as product. The increase in numbers to 90 people plus some as yet unannounced outsourcing of development capabilities give Xtel the expertise needed to increase its influence. The only challenge we are aware of for Xtel is an ability to grow as it would like to. It did grow 20% in 2008 and a had higher earnings before interest, taxes, depreciation and amortization (EBITDA) margin than other vendors we cover, but it all too often finds its clients stymied by global mandates from the home office in favor of solutions that don't fit in southern Europe. It then takes significant push and pull for Xtel to get the chance to show what it can do and to secure the deal.
Publication Date: 18 December 2009/ID Number: G00173152 Page 20 of 22
Evaluate Xtel when: You need a solution that truly fits the southern European market but is rapidly going Pan-European, has excellent usability and analytics, has harnessed the power of predictive modeling, and is actually fun to use.
Rating: Positive
RECOMMENDED READING
"Ignore Change Management Issues at Your Own Peril When Deploying Field Sales Applications in Consumer Goods"
"Case Study: Global Consumer Goods Company Improves Promotional Execution and Profitability Through Integrated Promotion Optimization"
"Cool Vendors in Consumer Goods, 2009"
"Vendor Rating: CAS"
Vendors Added or Dropped
We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor.
Gartner MarketScope Defined
Gartner's MarketScope provides specific guidance for users who are deploying, or have deployed, products or services. A Gartner MarketScope rating does not imply that the vendor meets all, few or none of the evaluation criteria. The Gartner MarketScope evaluation is based on a weighted evaluation of a vendor's products in comparison with the evaluation criteria. Consider Gartner's criteria as they apply to your specific requirements. Contact Gartner to discuss how this evaluation may affect your specific needs.
In the below table, the various ratings are defined:
MarketScope Rating Framework
Strong Positive Is viewed as a provider of strategic products, services or solutions:
• Customers: Continue with planned investments.
• Potential customers: Consider this vendor a strong choice for strategic investments.
Positive Demonstrates strength in specific areas, but execution in one or more areas may still be developing or inconsistent with other areas of performance:
• Customers: Continue planned investments.
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