Sales and Operations Planning Solutions AXIS Q3 2009

Presented by:

Nari Viswanathan, Vice President / Principal Analyst Supply Chain Management

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© 2009 Aberdeen Group, Inc. All rights reserved. Reproduction and distribution in any form without prior written consent is forbidden. AXISTM is presented for informational purposes only and contains content from sources believed to be reliable. Aberdeen disclaims all warranties as to the accuracy, completeness or adequacy of such information. No representation or warranties to the suitability of the providers mentioned herein is made or should be interpreted nor shall Aberdeen have any liability for errors, omissions or inadequacies of the information presented. The opinions expressed herein are that of the Aberdeen Group and are subject to change without notice.

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Executive Summary Introduction

Contents

Aberdeen Group classifies Sales and Operations Planning (S&OP) software as a solution that supports the S&OP process in the following ways: •

Operational S&OP. This enables the process steps prior to the Executive S&OP meeting including product review, demand review and supply review. These steps are critical to identify the demand from customers (sales input, marketing input and customer input) and being able to match it with supply (materials, capacity). Advanced organizations are able to optimize this plan based on financial considerations as well. • Executive S&OP. Once the supply and demand have been determined, they have to be reconciled at a formal meeting, typically referred to as the Executive S&OP meeting. This is the stage where the S&OP plan is collaboratively discussed and finalized among the various stakeholders such as supply chain, sales, marketing, finance etc. The benefits of the S&OP process are improved asset utilization, improved customer service, improved forecast accuracy and improved financial metrics like profit margins. Based on Aberdeen’s research, i2 Technologies, Oracle (Demantra), and Demand Solutions are the top performing S&OP software solution providers when it comes to the Value Delivered to customers and the Market Readiness of the vendors themselves. This report is intended to help facilitate an understanding and selection of S&OP solutions for end-user organizations.

Executive Summary ......................3 Chapter 1: Analyst Insights.........4 Chapter 2: Recommendations ...8 Chapter 3: How to Read the AXIS ....................................................... 10 Table 1: Aberdeen AXIS Vendor Breakdown for S&OP Solutions12 Chapter 4: Vendor Snapshots . 13 Specialist S&OP Solution Providers Snapshot Supplement................ 29 Appendices.................................. 36

The Sales and Operations Planning Axis

Source: Aberdeen Group, Q3 2009

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Chapter 1: Analyst Insights S&OP initiatives are meant to enable a company to accomplish its business goals of cost reduction, revenue enhancement, customer service and product differentiaton. The following sections identify the top objectives of S&OP initiatives, the relevance of S&OP solutions to those objectives, and the challenges of S&OP deployment. Given that S&OP is a process, different organizations can be at different levels of maturity. Integrated Business Planning (S&OP 2.0) is an advanced form of the process. The key difference between S&OP 1.0 and S&OP 2.0 are shown in Table 1. Table 1: Integrated Business Planning Process versus Traditional S&OP Area

S&OP 1.0

Aberdeen AXIS The Aberdeen AXIS is an objective, fact-based vendor assessment methodology, based on vendor performance in KPI benchmarks from Aberdeen’s domain-specific research, and the Market Readiness of the organization determined by over 250 evaluation criteria.

Integrated Business Planning (S&OP 2.0)

Business Objective

Supply / demand balancing

Not simply about matching demand and meeting customer needs. Considers several plan alternatives and chooses one that best represents the business drivers. Objective is revenue and profit

Process

Rigid and prescriptive

Rules and exception based

Technology

Weak and nonintegrated

Enables processes with workflows

Frequency

Monthly or quarterly

Monthly in many cases, but with ability to rapidly handle exception situations. Focus on real-time adjustments to market events

Scope

Enterprise focus

Cross-functional and customer focused

Source: Aberdeen Group, Technology Strategies for Integrated Business Planning, June 2006

Top Objectives for S&OP Initiatives The primary goal of S&OP is to ensure the alignment of business goals with supply chain tactics. The following are the top business objectives companies try to achieve through their S&OP processes, according to Aberdeen research: •

Revenue expansion. Sales revenue can be increased through approaches such as price management, promotions and intelligent demand forecasting. Thirty-two percent (32%) of respondents identified revenue expansion as a means of driving top-line growth.

•

Customer service. Getting the products to the customers exactly when they need them with zero defects is critical to gain customer

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Survey Overview The results are based on relevant survey responses from about 1,100 enterprise end-users, responding to questions relating to their experiences with S&OP solution providers

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retention, which is important in today’s economy. Twenty-six (26%) of respondents identified customer service as the primary business goal for their organization. •

•

Cost reduction. If the total landed costs for products are not tightly controlled, margins suffer. Economic volatility over the past several years has been illustrated by highly unstable customer demand, raw material, fuel, and commodity prices resulting in escalating supply chain costs. Twenty-five percent (25%) of respondents identified cost reduction as a means of driving top-line growth. Differentiate the organization based on products. Introducing new products that are a good fit with customer requirements calls for significant upfront planning. The issues that need to be considered are: what is the ideal time for launching the new product, how many of the new product should be manufactured, how to avoid cannibalization with other products, etc. Seventeen percent (17%) of respondents in past Aberdeen research identified product-related innovation as the primary business goal for their organization.

Sector Definition Sales and Operations planning process refers to the process of identifying demand and balancing it with supply. In order to arrive at the supplydemand balance, inputs from several organizations within the organization has to be obtained such as sales, supply chain, marketing, procurement, engineering and the executive management.

Aberdeen research finds that even though the business goals of organizations are well known, the supply chain tactics adopted by organizations through the S&OP process are not well aligned with these business goals. There is significant opportunity to enable this alignment through best practices.

Key Determinants of S&OP Success In order to identify how the capabilities of S&OP solution providers can result in value delivered for their customers, it is important to understand the key determinants of S&OP success. The key metrics that define the top performers are: a) Return on net assets. This is a key metric that identifies the efficiency of utilization of assets like capital equipment, inventory, distribution warehouses etc. As part of the S&OP process, it is important to ensure that in addition to ensuring cost reduction, the organization’s existing assets can be utilized to the maximum possible extent. b) Gross profit margins. S&OP processes need to focus not only on reducing costs but also on increasing revenues. Success in this effort translates into improvements in gross profit margins. c) Customer service levels. The order fulfillment efficiency and the ability to place the right inventory at the right location are measured by customer service levels. S&OP processes need to result in the ability to create the most effective supply chain network for both strategic and operational processes. d) Cash-to-cash cycles. Cash-to-cash cycle is the metric that measures the speed of an organization to get cash from its customers and deliver payments to its suppliers. The lower the

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cash-to-cash cycle, the better the performance for the organization in terms of cash flow. e) Forecast accuracy. Forecast accuracy measures the effectiveness of an organization in predicting the demand of its customers and ensuring that the right products are manufactured or procured. The forecasting process can be performed either on a monthly, weekly, or in some cases, daily basis.

Aligning Solution Benefits to Business Objectives How are S&OP solutions relevant to meeting companies’ business objectives? Successful initiatives are a mix of process, organizational, performance measurement, and knowledge management changes. However, top performers also include the deployment of S&OP solution capabilities as an enabling aspect of their initiatives. The benefits of these capabilities include: •

Improved ability to sense customer demand. Top performers are two-times as likely to have the ability to sense and forecast based on customer demand. Including Point of Sales (POS) information in the forecasting process requires significant data management and processing capabilities because these processes are difficult to perform manually.

•

Improved ability to model supply constraints. Supply and material constraints are difficult to consider during the longer term planning horizon due to the complexity involved with the large volumes, the number of constraints. S&OP solutions need to provide the ability for planners to model and apply supply constraints at an aggregate level (rough cut capacity planning). Top performers are two-times as likely to have the ability to perform unconstrained scenario analysis during supply demand balancing.

•

Improved ability to collaborate with stakeholders. In addition to the process challenges involved, there are also technology capabilities that are involved in enabling collaboration. There are several stakeholders who need to provide collaborative inputs into the sales forecasts like sales, marketing, demand planners, etc. These collaborative discussions may have to be conducted multiple times in both offline and online formats to arrive at a consensus forecast. If the numbers of geographies, products and customers are high then the scalability of the solution is a concern as well. Top performing companies are 1.4 times as likely to leverage a web based collaboration solution. The web based solution is critical because of the large number of trading partners involved (retail customers, wholesalers, distributors) and the heterogeneous IT architecture that they may possess.

•

Improved ability to respond to market events. The S&OP process needs to be made more responsive, in particular by increasing the standard S&OP process frequency (currently conducted monthly). For example, some companies have a monthly S&OP meeting schedule but do supply-demand matching much more rapidly – daily or weekly. This requires a well orchestrated data, software, and process

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Analyst Insight Faster and more frequent S&OP cycles are required to keep pace with shorter product life cycles, compressed order lead time requirements, and more dynamic demand. Technology enables automating these processes and decreases the time that S&OP planners spend on manual operations versus doing more productive work. More importantly, technology enables the ability to rapidly react when real-life scenarios unfold in real-time, such as supply shortages or plant breakdowns.

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infrastructure. Top performers are 2.5 times as likely to be able to respond to unplanned events in a timely manner. •

Improved ability to convert S&OP volumetric plans based on multiple criteria including financial constraints. Tools that allow companies to effectively toggle between the financial and operational views must be explored. Volumetric plans must be converted into sales revenue with the ability to get visibility into pricing at the SKU level. Top performers are 1.5 times as likely to implement a management review dashboard with financial and operational metrics.

The Barriers to a Successful S&OP Solution Deployment Implementing a technology enabler for S&OP is not an easy task – it requires significant focus from the implementation team and executive management support. There are a number of barriers and challenges that must be considered and addressed when deploying an S&OP solution: •

Cultural resistance to change. Change is never easy, especially when it comes to new organizational roles, processes, procedures, and technology solutions. Forty-one percent (41%) of all respondents indicated that overcoming the organizational resistance to change is a barrier to process change. Over 78% of respondents indicate that they are leveraging spreadsheets for managing their S&OP process. However, spreadsheets’ limitations are extensive and contribute to the fact that current S&OP processes are so poor in terms of improving corporate performance.

•

Integration challenges. Most companies have organically grown their S&OP technology capabilities over time, with their ERP solutions providing some parts of the solution, their Advanced Planning and Scheduling (APS) best-of-breed vendor providing the rest, along with some add-on business intelligence layer. This creates significant integration challenges when companies try to combine data from multiple data sources into a coherent workflow.

•

Lack of optimization capabilities. The ability to support decisions on product line, price policy, capital expenditures, financial policy, network design, open / close, supply chain policy, etc. is critical to S&OP technology. Without optimization, scenarios cannot be compared on an “apples-to-apples” basis. Optimization does this by making sure each scenario represents “the best the company can do” under the specific sets of assumptions. For example, different scenarios might require different production allocation, different use of raw materials, etc.

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Chapter 2: Recommendations Before selecting a technology solution, companies must assess the ability of solution providers to address fundamental requirements that are critical to both a successful deployment and a successful S&OP initiative. The following factors must be considered when developing the strategy behind the deployment of your S&OP solution: •

Develop a firm vision for S&OP that is tied to the business strategy. Top performers are two-times as likely to have their S&OPrelated tactics aligned with the business goals. It is critical to have executive sponsorship as well as commitment towards the S&OP process and technology implementation. Top performers are two-times as likely to have a full-time S&OP coordinator managing the S&OP implementation process when compared to all other companies.

•

Incorporate true customer demand. Top performers are twotimes as likely to implement demand forecasting capability first as part of the S&OP implementation. It is critical to have true customer demand-or at least the order history--driving the forecasts rather than just the shipping volume history.

•

Involve the CFO. S&OP is not just a supply chain process. It involves the need for linking supply chain metrics with the financial metrics, which requires engagement with the office of the CFO.

•

Provide executives with visibility into metrics. Empowering executives within the organization and creating an atmosphere of accountability is critical. There should be an ability to deliver “just in time” information to key stakeholders of the S&OP process. There should be rich “cockpit” displays that allow real-time supply chain monitoring and support drill-downs into problem areas. Top performers are eight-times as likely as all others to have the ability to identify the root cause of an S&OP metric being off-target.

Analyst Recommendation While S&OP initiatives offer tremendous business value, more is required than just enabling a business process. It is also not just about automating an existing business process. There is a need for a holistic approach of improving processes, making organizational changes and implementing technology to make the S&OP initiative a success.

To best execute on the vision for an S&OP solution deployment, strongly consider the following recommendations: •

Leverage the S&OP initiative to create a supply chain master data repository. Top performers ensure that S&OP initiatives are not done as one-offs from a data perspective. In other words, they don’t get the data through manual means as a custom project which ends being un-sustainable when data formats change or if application upgrades have to be made. Rather, they are almost two-times as likely to create a master data repository for customers, products, and vendors.

•

Create a supply chain intelligence dashboard for financial and operational metrics. Embedded analytics tools should be incorporated into S&OP applications so that business analysts or midlevel supply chain / operations managers, for whom business intelligence is not a primary job responsibility, are able to create reports and monitor supply chain performance. In addition, executive management should have the ability to view dashboards for both operational and

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financial metrics. Top performing companies are three-times as likely as all others to have the ability to have high-level reporting designed for executive management. •

Monitor the S&OP plan’s execution. It is not only critical to develop a good S&OP plan; it must also be executed well. There is a need for a technology layer that can continuously monitor the performance of the S&OP plan. Top performing companies are seventimes as likely as all others to have the ability to proactively monitor daily performance against S&OP metrics.

•

Ensure that optimized plans are created. Top performers indicate that they have a strong ability to create upside opportunity assessment scenarios to analyze an S&OP plan. The first step towards creating an optimized plan is to be able to create constraints that model the business scenarios such as capacity, materials, distribution, etc., at an aggregate level. There should be an optimization layer that makes it possible to set an objective function such as cost minimization, revenue or profit maximization, etc. Then finally the optimization algorithm should generate a plan that meets all the defined constraints and meets the objective function.

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Analyst Recommendation Prior to selecting an S&OP vendor, time invested in understanding and documenting existing processes will be well spent (the “As-Is” process). It is also critical to build the business case associated with S&OP with the key stakeholders: supply chain, manufacturing, sales and marketing. Then it is critical to assign an S&OP coordinator (typically within the supply chain organization) to manage the implementation process. There is a need to understand the current technology architecture in the organization and identify existing gaps. Next, compare your organization’s requirements against the capabilities offered by the S&OP solution providers. Ensure the vendor’s vision of S&OP is in alignment with the problems that need to be solved.

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Chapter 3: How to Read the AXIS Aberdeen AXIS provides an objective, fact-based vendor assessment that looks at the provider’s history of Value Delivered (Y-axis) and its Market Readiness (X-axis). The results are based on relevant survey responses from an overall pool of hundreds of enterprise end-users responding to questions relating to their experiences with the respective solution or services. Vendors represented on the AXIS are illustrated by their customer’s performance against the various axes as well as the visibility they received from the market as part of the research. Aberdeen’s research is predicated on primary survey responses with followon telephone interviews. All responses are blinded and follow Aberdeen’s published methodology. Data collected is reviewed and interpreted by the respective Aberdeen research team and draws upon information typically collected over the prior 12-month period. Based on business-user survey responses from qualified research participants, vendors have been positioned in one of four categories in the Aberdeen AXIS chart:

Aberdeen AXIS The Aberdeen AXIS is an objective, fact-based vendor assessment methodology designed to assist organizations in making technology purchasing decisions. The assessment is based on vendor’s customers’ performance in KPI benchmarks from Aberdeen’s domain-specific research, and the Market Readiness of the organization as determined by over 250 evaluation criteria.

1. Champion. Vendor has demonstrated superior proficiency in delivering both real value as well as the ability to serve and support its installed user base. 2. Contender. Vendor has consistently delivered on ensuring that users achieve a measurable value for their investment as well as the ability to continue to support and service its customers. 3. Competitor. Vendor is progressing toward delivering a balance of value and service / support / sustainability. Additional opportunities remain to enhance the value realized by its customers as well as its ability to meet the ongoing needs of the market. 4. Challenger. Vendor has achieved market visibility but has an opportunity to assist customers in achieving the value they’re looking to realize from the investments made. Vendor readiness remains a concern.

Value Delivered (Y-axis) The Value Delivered by a vendor is determined by the percentage of survey respondents using their solution that achieve Best-in-Class performance. Over the past 12 months, Aberdeen has surveyed hundreds of end-user organizations on their use of S&OP solutions. Aberdeen’s research team analyzed the responses based on stated strategies, KPIs and business outcomes. Using Aberdeen’s proprietary PACETM methodology, end-users are placed into three performance maturity groups: the top 20% of performers are considered “Best-in-Class,” the middle 50% are “Industry

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Average,” and the bottom 30% are “Laggard.” Survey respondents, as part of the process, identify the various products and services they have deployed. The aggregated performance of a technology vendor’s end-users, complemented by live interviews, determines the relative Value Delivered to the market.

Market Readiness (X-axis) Market Readiness is a critical assessment of the technology vendor’s current ability to serve the market based on over 250 objective assessment criteria. Vendors are provided a standard questionnaire that seeks to thoroughly assess their ability to support their installed base, to bring new products to market, to serve the global community, and to sustain economic cycles, among other KPIs. The questionnaire is augmented by customer interviews and independent research to validate the findings. Vendor briefings may be conducted to provide additional clarification and insight. Each vendor’s risk and reliability, strengths and challenges, historical performance, and future outlook are evaluated, and a weighted score is determined. The result is represented as a numerical outcome on the AXIS by way of Market Readiness. Solid circles on Table 1 represent solution providers from which comprehensive data was made available for review and validation; reverseshaded circles represent vendors from which response or available information (i.e., public records) was limited in scope. Rather than project the suitability of a particular feature or function, the AXIS is a customer-centric view of the success organizations have had with various providers and the potential risk, or lack thereof, associated with the vendor’s ability to meet their current and future obligations. These obligations include, but are not limited to, service, support, product updates and upgrades, staffing (e.g., customer service), and financial stability. Vendors falling into the Champion or Contender categories are logical partners for future projects. Those identified in the Competitor and Challenger areas are also strong potential suitors for consideration with additional investigation.

Research Methodology Aberdeen applies a unique methodology to benchmark research that evaluates the business Pressures, Actions, Capabilities, and Enablers (PACE) that drive corporate performance. The success of business strategies are determined by a Competitive Framework in which the top 20% of achievers are Best-in-Class, the middle 50% are Industry Average, and the bottom 30% are Laggards. Companies that identify the most influential pressures and take the most effective actions are most likely to achieve superior performance. The solution providers that help enterprises achieve this Best-in-Class performance are recognized in the Aberdeen AXIS.

The goal of the AXIS is to provide the competitive intelligence business users require to make smart, informed decisions about their technology initiatives.

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Table 1: Aberdeen AXIS Vendor Breakdown for S&OP Solutions Market Readiness

Value Delivered

Total Score

i2 Technologies

35

60

95

Oracle

38

51

89

Demand Solutions

26

61

87

AVERAGE SCORE

32

52

84

Infor

28

56

84

SAP APO

32

49

81

Logility

33

47

80

JDA (Manugistics)

33

46

79

IBM (Cognos)

29

45

74

Company: Total Scores

Source: Aberdeen Group, Q3 2009

Other Vendors Who Play in the S&OP Space There are several vendors who play in the S&OP space but are excluded from the AXIS Table 1. for various reasons including: 1. Failure to achieve adequate market visibility within the context of the surveys. In other words not enough survey respondents from Aberdeen surveys who indicate a solution provider is being used for enabling their S&OP processes 2. Failure to provide requisite Market Readiness information 3. Inability to validate Market Readiness information (i.e., customer interview responses are inconsistent with vendor representation) These are the solution providers who merit a mention in this document due to some of their unique capabilities with respect to enabling the S&OP processes (arranged alphabetically): Adexa, Aspen Technology, John Galt, Jonova, Kinaxis, Riverlogic, Smart Software, Steelwedge, Supply Chain Consultants & Symphony-Metreo,. These providers are discussed in Chapter 4.

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Chapter 4: Vendor Snapshots Roles and Scenarios under Consideration

Key

This chapter is written for the following organizational roles: VP of Supply Chain, CIO, CFO, or COO looking to create a short list of vendors that can support an S&OP implementation from a technology as well as process consulting standpoint.

Higher than average score In line with average score Lower than average score Industry Legend

Categories of S&OP Solution Providers •

•

•

S&OP solutions in an enterprise ERP suite. In this category of solution providers, the S&OP solution is offered within an ERP suite or within a best-of-breed offering provided by an ERP solution provider. The close integration of the S&OP solution with the transactional ERP backbone is what usually attracts organizations to this type of solution. Given that the data requirements for enabling the S&OP process are very extensive, it is important to factor in the integration requirements during the selection process. ERP providers have also created add-on S&OP solutions over the course of the last few years to try to reach functional parity with the best-of-breed providers. S&OP solutions from Infor, Oracle, and SAP fall into this category. S&OP solutions in an SCM best-of-breed suite. In this category of solution providers, the S&OP solution is offered within a suite of bestof-breed SCM solutions (also referred to as Advanced Planning Solutions). The reason why organizations adopt these solutions is the embedded industry-specific domain capabilities, depth of optimization expertise and specialized focus on SCM. S&OP solutions from i2 Technologies, JDA, Logility, and Demand Solutions fall into this category.

Discrete: automotive, industrial product manufacturing, and industrial equipment manufacturing High-tech / electronics: computer equipment and peripherals, health / medical / dental devices or services, hightechnology, telecommunication equipment / services Consumer: consumer durable goods, consumer packaged goods, consumer electronics, distribution, food / beverage, retail, wholesale Process: chemicals, metals and metal products / mining / oil / gas, paper / lumber / timber, pharmaceutical manufacturing

Stand-alone S&OP solutions or pure-play S&OP solution. These S&OP solutions are not part of either an enterprise or APS suite. The value of a stand-alone or “point” S&OP solution lies in fact that they have a focused approach to solving the problem and may have higher domain expertise when it comes to specific industry segments. S&OP solutions from Steelwedge and Riverlogic fall into this category.

S&OP Solution Characteristics The following are some of the evaluation criterion for the S&OP solutions: •

Holistic consideration of supply and demand constraints. In order to improve end user metrics such as RONA and forecast accuracy there is a need to balance tradeoffs between demand forecasting and supply planning. Too much focus on being demand driven or supply driven will result in optimizing only one of the metrics.

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•

Data integration architecture. In order to impact cross-functional metrics such as cash-to-cash cycle and customer service levels, there is a necessity to have a strong data integration architecture for the S&OP process

•

Real-time S&OP instead of traditional monthly frequency. In order to obtain improvements in key performance metrics, there is a need for the capability to measure and impact these metrics rapidly instead of doing it at a slower rate. This is the approach of performing real-time S&OP.

•

Ability to create custom workflows. For larger enterprise companies, the S&OP process is different across companies as well as across business units within a company. Companies need to have the ability to create customized workflows without significant development costs and long implementation times.

•

Packaged application for supporting mid-size customers. The requirements for the mid-size and some of the smaller large enterprises (less than $4 Billion USD) is to be able to deploy an out of the box solution that supports the key requirements of the S&OP process but with a lower cost of ownership.

•

Integrated data source due to ERP back bone. S&OP processes require numerous data elements like products, customers, forecasts, inventory, prices, etc. These data elements are either stored in transactional legacy systems or ERP software. These data elements are necessary to instantiate the S&OP process and impact the 5 key metrics mentioned in Chapter 1.

The vendor snapshots provide a high level overview and insight into various vendors identified in this AXIS report. The review is based on primary research along with the analyst team insight drawn from briefings and customer interviews.

i2 Technologies AXIS Benchmark: i2 Technologies

Overview i2 Technologies (NASDAQ: ITWO) was formed in 1988 by Sanjiv Sidhu and Ken Sharma as a factory planning and scheduling software company. In the 1990’s, i2 expanded its solution to address supply chain problems that spanned multiple facilities and plants through the Supply Chain Planner software. The mid-1990’s through 2000 was a period of acquisition of multiple software companies such as Think Systems (Demand Planner), Optimax (scheduling) and ITLS (TMS). The dot-com bust resulted in a period of financial instability and accounting issues that were finally resolved by 2009. Notwithstanding this issue, in the last six years i2 has created a SOA based supply chain operating system referred to as the i2 Platform.

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Market Readiness Score: 35 Average Score: 32 Value Delivered Score: 60 Average Score: 52

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Category of Solution These are S&OP solutions in an SCM best-of-breed solution. Products include demand manager, supply chain planner, and a sales and operations management overlay application.

Observations When it comes to Value Delivered as a measure of helping manufacturers balance their supply and demand to meet business goals, i2 Technologies customers retain an above average score. i2 customers have indicated that they have gained significant improvements in those key metrics identified in Chapter One. The following are important aspects of the i2 solution: •

Holistic consideration of supply and demand constraints. i2 Technologies provides Demand Manager, a thin client, web-based solution that can model multiple dimensions and create forecasts at multiple levels of granularity. It also allows different stakeholders to be involved in the S&OP process. In addition, the i2 Supply Chain Planner module provides the ability to model different types of manufacturing and distribution constraints to balance the demand with supply. The i2 S&OM module provides a rough cut capacity planning algorithm for evaluating constraints during scenario management. In addition the i2 S&OM provides planning process orchestration capability, which brings structure and cadence to the demand and supply planning processes.

"We leverage the i2 Demand Manager and i2 Supply Chain Planner modules to enable the S&OP process at our company. The solution has been very effective so far and has resulted in improved agility and flexibility." ~ VP Supply Chain, Large High-tech Manufacturer

•

Breadth of solution capabilities. In addition to the supply-demand balancing through Demand Manager and Supply Chain Planner, i2 technologies provides an Inventory Optimization solution as well as an overlay application (called S&OM) to address these challenges. The S&OM module has an Excel-like interface to support the Executive S&OP process.

•

Architectural and development strategy. From an architectural perspective, i2 Technologies provides a web-based solution with a native business process platform called the i2 Platform. The process requirements for the executive S&OP process are very different for each company. Process excellence at the executive S&OP stage is critical to balance supply, demand, and finance. The metric that is impacted by this is the gross profit margin. Volumetric balancing of supply and demand is not sufficient and there is a need to reconcile the S&OP plan with the organization’s budgets and financial goals, which is done during the executive S&OP process. Hence, the i2 Platform provides critical flexibility and customizability of the solution.

"We are a large global organization with extreme complexity. We had to do significant customization to the i2 solution to make it fit our needs. The customization was driven by our top management to ensure that we focus on the process rather than force fit an existing process to fit an application."

Despite the fact that i2 Technologies’ customers have experienced success based on the value delivered score, there is room for improvement in the product and strategic issues to address. Flexibility of the software can be perceived as complexity by the mid-size sector and hence mid-size companies may not be able to leverage the capabilities offered by the solution due to a lack of IT resources. Even though the solution capabilities are strong for high-tech and discrete manufacturing, CPG and process manufacturing companies will find that the solution capabilities offered by i2 are not highly differentiated from other solution providers.

~ Director Supply Chain, Large CE Manufacturer

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From a Market Readiness perspective as a factor ensuring customer success, i2 Technologies has earned an above average score based on both its focus on business processes as well as its global deployment capability. There are some positive aspects to the global deployment capability of i2 Technologies. The first is the strong presence in Asia specifically in Japan, Korea and China, though the customers in these regions are likely to leverage the more traditional S&OP process enabler modules like demand manager and supply chain planner. i2 also has a large solution center in India where consultants can be engaged to support global S&OP implementations and the presence of a development organization in India to ensure R&D at a lower cost. However, i2 Technologies do not have a strong presence in Europe in either deployments or support. The other characteristic that positively differentiates i2 Technologies’ Market Readiness score is the company’s focus on business processes from an industry vertical perspective. i2 looks at its customers’ processes, and how its products support those processes as a source of direction and guidance for future enhancements and new product capabilities. This focus on enabling business processes at an industry intersection has resulted in a library of templatized solutions that its customers can leverage. The i2 Technologies story is not entirely positive, however. Its financial predictability has not been what shareholders and investors would prefer, and the company has paid for it. Its stock has had significant ups and downs over the course of the last five years though i2 is coming off a relatively strong Q2 2009. Another issue is the lack of a strong process consulting partner eco-system to support the S&OP process and associated change management. Without such an ecosystem, user clients are left to do their own process reengineering. i2’s S&OP solutions should be shortlisted by any large size manufacturer that is considering an SCM solution to support its efforts. Companies in the Discrete and High-tech / electronics sectors should strongly consider i2. Those in the consumer and process industries should be more cautious. Mid-size companies should also be cautious about selecting i2 unless they have a strong IT organization that can configure and customize i2 solutions.

Oracle AXIS Benchmark: Oracle

Overview Oracle’s history as one of the largest software companies in the world is well known. In contrast with SAP, which developed its S&OP offering organically, Oracle’s S&OP solution builds on the background of Demantra (acquired in 2006). Demantra was founded in 1995 and developed as a pureplay SCM offering. While the last three years since the acquisition have certainly resulted in closer integration with Oracle’s larger E-Business Suite, Demantra is still a viable stand-alone solution. Oracle has now branded its SCM solutions as a “Value Chain Planning suite,” to highlight the expanded focus on financial and product chain integration with the supply chain.

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Market Readiness Score: 38 Average Score: 32 Value Delivered Score: 51 Average Score: 52

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Category of Solution Oracle falls into S&OP solutions in an SCM best-of-breed solution and S&OP solutions in an enterprise ERP suite. Products include Demantra Demand Management, Demantra S&OP (Overlay application), Oracle Advanced Supply Chain Planning, and Oracle Strategic Network Optimization.

Observations Based on customer responses, Oracle received a Value Delivered score that was in-line with the average. Oracle customers have indicated that they have gained moderate improvements in those key metrics outlined in Chapter One. The elements of Oracle’s solution set that are the most important for customer performance are: •

Integrated data source due to ERP back bone. Oracle ERP customers are able to extract data directly from the underlying transaction back bone in the Oracle E-business suite or the JD Edwards platform, both of which are integrated with the Oracle Value Chain Planning suite.

•

Holistic consideration of supply and demand constraints. In addition to a demand manager with multi-dimensional modeling and multi-level forecasting abilities, Oracle offers a forecast collaboration module which allows different stakeholders involved in the S&OP process to provide inputs to the forecasts. Additionally, the Oracle SNO and Oracle ASCP modules allow users to model different types of manufacturing and distribution constraints to balance the demand with supply. The Oracle ASCP module is integrated with the Demantra S&OP module.

•

Breadth of solution capabilities. In addition to the supply-demand balancing through Demantra Demand Manager and Oracle ASCP, Oracle provides Hyperion, which is a BI platform, and OBIEE, which is a BI platform for supporting S&OP processes. Demantra also provides an overlay S&OP platform for performing Executive S&OP.

•

Demand management in a real-time environment. Demantra’s heritage in the fast-moving consumer goods segment allows Oracle customers to perform demand-driven supply chain planning effectively and to improve their forecast accuracy.

"There is nothing wrong with an internal S&OP that running it everyday wouldn't improve our performance. However, by integrating point-of-sale driven consumer data in the planning process, we moved the S&OP into a real time sense and respond mechanism using Oracle’s Demantra solution. The impact to service levels, working capital and the bottom-line have been impressive." ~ Director, Consumer Electronics Manufacturer

Even though the solution capabilities are strong for consumer goods manufacturing and not as strong on the discrete manufacturing segment, Oracle has been bridging the gaps for other sectors like high-tech. Companies in discrete and high-tech sectors should get the roadmap from Oracle and ensure that their requirements can be covered by upcoming versions. Turning to the measure of Market Readiness, Oracle garnered the highest score, due in part to the following reasons: R&D focus on SCM solutions, strong up-selling into existing customer base, and strong execution globally. Oracle has been singularly focused on bridging gaps in its S&OP solutions based on customer requirements. It started in 2006 with a few discrete and © 2009 Aberdeen Group, Inc. All rights reserved.

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high-tech manufacturing capabilities and has nearly filled all the gaps in 2009. In addition, Oracle has been focused on up-selling the S&OP modules to its existing customer base, resulting in strong references and shorter sales cycles. Oracle has a strong global presence that it is leveraging for acquiring customers in Asia and Europe. Oracle’s S&OP solutions should be short-listed by any mid-size or large size manufacturer that has an Oracle ERP backbone and that is considering an SCM solution to support its efforts. Non Oracle ERP users should be more selective: they need to ask for pilot implementation and Total Cost of Ownership (TCO) data before proceeding further. All industries should strongly consider Oracle based on the roadmaps that their product management team has built out.

Demand Solutions AXIS Benchmark: Demand Solutions

Overview Demand Solutions was founded in 1985 and is a wholly owned subsidiary of Logility. It is headquartered in St. Louis and has over 10,000 users of its solutions worldwide. Its main focus is the small and mid-size sector ($250 M - $ 1 Billion) and it has adopted a global distributor sales model to penetrate this sector. The company works with Value-Added Resellers (VARs) that offer more services than traditional VARs. Their sales representatives are also franchise owners who are responsible for implementation, delivery, and maintenance.

Market Readiness Score: 26 Average Score: 32 Value Delivered Score: 61 Average Score: 52

Category of solution Demand Solutions has S&OP solutions in an SCM best-of-breed solution. Products include DS Forecasting Management, DS Collaboration, DS Advanced Planning and Scheduling, DS Retail Planning and DS S&OP (overlay application).

Observations As evidenced by one of the highest Value Delivered scores, Demand Solutions’ users indicated that they have gained significant improvements across those key metrics identified in Chapter One. The key features of Demand Solutions offerings leading to this success are: •

Packaged application for the small and mid-size sector. Demand Solutions provides an application that is simple to install and deploy, and is tailored for the small and mid-size sector which helps their customers to focus on metrics.

•

Holistic consideration of supply and demand constraints. To go along with the multi-dimensional modeling and multi-level forecasting functions of its demand forecasting solution, Demand Solutions provides the DS Collaboration product, which enables the inclusion of input from various departments in the S&OP process. Demand Solutions also offers the capacity planner within S&OP, allowing the ability to model different

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types of manufacturing and distribution constraints to balance the demand with supply. •

Specialized products for handling Executive S&OP. When balancing performance over the key metrics cited in Chapter 1, there is a need for an overlay solution layer that provides the executive end-toend visibility of the metrics. Demand Solutions created one of the first S&OP overlay applications in the marketplace addressing the Executive S&OP process. Demand Solutions customers who deploy the S&OP overlay module are able to get visibility into key metrics.

While designed for the small and mid-size market, it is common to see the subsidiaries of large enterprises leveraging Demand Solutions, as the requirements and behavior of the subsidiaries mirror those of mid-size companies. This is especially true for European and Asian subsidiaries. Positive aspects from a market readiness standpoint that companies evaluating Demand Solutions should take note of are: its unique distribution model enabling customer satisfaction, geographic reach, strong financial stability from its parent company (Logility) and small and mid-size focus. As mentioned previously, Demand Solutions does not depend on a typical VAR model where a sales representative sells the solution and the implementation is done by either other consultants or the customer. A mix of exclusive distributors and Demand Solutions employees provide the implementation, maintenance, and share responsibility for customer satisfaction. This model has resulted in being able to obtain significant geographical reach – Demand Solutions signed up two sales representatives in India late last year and recently added representatives throughout Asia. Also the specific focus on small and mid-size companies has resulted in simplicity of solutions that is difficult to find in other software vendors. Oliver Wight (an S&OP strategy consultancy) has provided inputs to Demand Solutions for building its S&OP overlay module and continues to work with it on process engagements.

“We have been using the Demand Solutions products for enabling S&OP for the last 5 years. We are a division of a large multi-national company but our unit behaves and is set up like a mid-size company. The product is ideally suited for our limited IT infrastructure and is easy to use by our business users.” ~ Director of Supply Chain at a division of a large multi-national manufacturer

Demand Solutions provides a client-server based architecture solution which can be web-enabled through Citrix or a terminal service but does not offer SaaS model, which is a requirement for some mid-size companies. Demand Solutions also provides a web-based module called DS collaboration. Demand Solutions has customers from all industries, it has not focused on industry vertical templates but does have vertical functionality built into its products from 15 years of adding customer requirements to the core S&OP module without additional charge to customers. Demand Solutions is a certified partner for Microsoft NAV and GP and is working on certification for AX. It also provides integration adaptors for all the ERP platforms like SAP, Oracle, Infor, etc. Demand Solutions should be shortlisted by any small or mid-size manufacturer that is interested in obtaining a packaged application with a small IT investment. Large enterprises should cautiously evaluate Demand Solutions to see if their requirements are fulfilled by the solution.

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Infor AXIS Benchmark: Infor

Overview Infor is known as an ERP provider with best of breed Supply Chain Planning solutions, although considerably younger than Oracle and SAP. Infor was founded in 2002 and is well known for growth through acquisition rather than the organic development of its ERP solutions. Infor’s entrance into the SCM market followed the same path with their very first acquisition of Agilisys (Advanced Planner & Advanced Scheduler). Infor has since acquired Mercia (Demand Planning) in 2004 followed by SSA Global in 2006 which included solutions from Baan, Berclain and CAPS Logistics. Since that time, Infor has been gradually adding further capabilities into its Supply Chain Planning Suite.

Market Readiness Score: 28 Average Score: 32 Value Delivered Score: 56 Average Score: 52

Category of solution Infor provides S&OP solutions that are components of their ERP suites and can be delivered as stand alone offerings to non-Infor ERPs. The modules include: Demand Planning, Inventory Planning, Replenishment Planning, Planner, Scheduler, Advanced Planner, Advanced Scheduler and Supply Chain Network Design, plus some overlay technologies such as Event Management and Performance Management.

Observations Viewing Value Delivered as a measure of helping manufacturers balance their supply and demand to meet business goals, Infor’s received an above average score. Infor’s customers have noted average improvements in those metrics profiled in Chapter 1. These improvements can be attributed to the following capabilities within the Infor solution: •

Integrated data source due to ERP back bone. Infor customers are able to access data directly from the underlying transaction backbone in the various ERP modules that Infor has acquired or developed over the years, such as Baan/LN, System 21, BPCS/LX and SX.

•

Holistic consideration of supply and demand constraints. Infor (Mercia) provides a demand manager solution that can model multiple dimensions and create forecasts at multiple levels of granularity. The Demand Manager product also enables the involvement of different stakeholders in the S&OP. In addition, the Advanced Planner module provides the ability to model different types of manufacturing and distribution constraints to balance the demand with supply.

•

Packaged application for the mid-size sector. Infor’s traditional strength has been in the mid-size sector through its demand planning software. Infor customers are able to impact the forecast accuracy metric through the implementation of the Bayesian forecasting capabilities available in the Mercia module.

However, there are some facets of the Infor solution that end users have to be aware of. Infor has traditionally served the mid-size sector, which © 2009 Aberdeen Group, Inc. All rights reserved.

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traditionally demands packaged applications. In addition, end users that are using one of the many ERP modules from Infor should definitely consider Infor’s SCP suite as an add-on, but prior to doing so should get a clear picture of the integration requirements. Finally, Infor’s strength in process and specifically food / beverage is great news for the customers in those sectors. Organizations in other industries should look first to the S&OP capability embedded within the Infor ERP footprint to see if it meets their needs. Beyond this, Infor customers are advised to look selectively at components such as Demand Planning or Advanced Planner until Infor’s future Evolve S&OP components are available. The market readiness factors that end users looking at Infor should consider are: best-of-breed approach for rolling out SCM, partnership ecosystem and global presence. Infor has taken the approach of increasing the connectivity of its SCM solutions to it’s ERP suites while it has been structuring it’s internal supply chain software organization to operate as a best of breed solution company, with relatively good success. Infor has a good network of consulting partners and also has a good global presence in Asia and Europe. End users who are looking at Infor that are in process industries (food and beverage, CPG, chemicals) should shortlist Infor. However, those who are in the discrete or high-tech sectors should ask for references and the product roadmap. Another challenge with S&OP related processes is the need for process consulting (strategy and change management) to support end users. End users should factor in third party consulting support while selecting Infor. An active challenge that Infor faces is the lack of brand awareness in the general market, even in its own customer base. Companies that have one of the myriad of ERP systems owned by Infor should look at the S&OP modules offered. In conclusion, Infor’s S&OP solutions should be shortlisted by any mid-size manufacturer that has either an Infor ERP backbone or any other ERP system. Large manufacturers should be selective in considering Infor, given lack of functional depth in particular industries. Enterprises in the consumer and process industries should strongly consider Infor, while those in discrete and high-tech should be more cautious.

SAP (APO) AXIS Benchmark: SAP APO

Overview German-based SAP can boast a long history and one of the most expansive software portfolios in existence. Like its competitors Oracle and Infor, SAP provides an integrated enterprise solution suite, notably including ERP solutions. SAP Advanced Planning and Optimization (APO) is the best-ofbreed extension of SAP. SAP APO is currently on its seventh release, which can be purchased stand-alone or as an integrated part of the full SAP Business Suite. Unlike Oracle, which acquired Demantra, SAP developed its S&OP solution organically. In addition, SAP has acquired Business Objects,

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Market Readiness Score: 32 Average Score: 32 Value Delivered Score: 49 Average Score: 52

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which is also used by several organizations as part of the enablement of the Executive S&OP process through its Business Intelligence capabilities.

Category of solution SAP has S&OP solutions in an enterprise ERP suite. Products include SAP Advanced Planning and Optimization (includes Demand Manager, Supply Network Planning Supply Network Collaboration), Business Objects, and Inventory Optimization (through SmartOps). As of this time, SAP does not possess an overlay S&OP module.

Observations Derived from the survey responses of its end-users, SAP achieved a Value Delivered score that was lower than the average. Only those respondents who indicate that they were leveraging SAP Advanced Planning and Optimization were considered for calculating this score. Their customers have indicated that they have seen an average improvement in those metrics cited in Chapter One. Those aspects of the SAP solution set that are impacting customer performance are: •

Integrated data source due to ERP back bone. SAP customers are able to extract data to feed into the S&OP process directly from the underlying transaction back bone in the SAP R/3 ERP software.

•

Holistic consideration of supply and demand constraints. In addition to providing the ability to model multiple dimensions and create forecasts at multiple levels of granularity, SAPs demand management solution also allows for creating any number of dimensions for forecasting demand. Additional functionality is provided by the Demand Manager product within the APO suite, which allows different stakeholders to be involved in the S&OP process, and the Supply Network Planning module within APO, which allows the ability to model different types of manufacturing and distribution constraints to balance the demand with supply.

•

Breadth of solution capabilities (including Business Objects). SAP APO provides a wide range of products to support the S&OP process. In addition to the transaction backbone provided by R/3 and the supply-demand modeling through APO there are the following additional capabilities: Inventory Optimization through a partnership with SmartOps (in environments where Sales Inventory Operations Planning processes are involved) and Business Intelligence capabilities through Business Objects.

There are, however, some areas of the solution that end users have to be aware of. The solution is not suitable for companies that do not have SAP as their ERP backbone due to the integration challenges involved. A challenge in the past has been the lack of process focus and a more IT-centric approach towards implementing S&OP projects. In recent times due to the introduction of the business value scenarios concept, some of these concerns have been mitigated but end users need to ask SAP to show the

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process library before proceeding further. SAP also does not currently have an overlay solution to support the Executive S&OP process. Focusing on Market Readiness, SAP has garnered an in-line with average score, due in part to their solution partner eco-system, consulting partner eco-system, geographic presence, and industry vertical coverage. SAP has a very large solution partner eco-system and hence customers have a wide range of solution providers to work with in enabling an S&OP process workflow. In addition, SAP also partners with a wide range of consulting providers like Bearingpoint, Accenture, Infosys, Hitachi Consulting, etc., to enable S&OP processes. SAP has a truly global presence that other companies will be hard-pressed to emulate. It also has an Industry Value Network approach where for each industry vertical there is a set of advisory council members who drive the solution template for that particular industry. This has resulted in SAP adopting what they call a “business value scenario,” wherein business processes such as S&OP can be enabled at the intersection of an industry vertical. There are some areas that end users must consider before selecting SAP, from a market readiness standpoint. SAP’s customer base is very strong in the process and consumer space (excluding retail). There are some industry segments where SAP’s customer base is not as developed, such as discrete manufacturing and high-tech. Another issue is that the SAP roadmap is quite slow to be developed and end users may not want to wait long before starting their S&OP journey. In this situation, end users must get prior roadmap acceleration commitment from SAP before proceeding further. SAP’s S&OP solutions should be shortlisted by any large-size manufacturer that has an SAP APO backbone and that is considering a SCM solution to support their efforts. Mid-size manufacturers should be selective in considering SAP – ask for pilot implementation and TCO data before proceeding further. Industries that should strongly consider SAP APO are consumer and Process.

Logility AXIS Benchmark: Logility

Overview Logility (NASDAQ: LGTY) has been in the supply chain software business for over 30 years. Prior to July 9, 2009, 88% of its stock was owned by American Software (NASDAQ: AMSWA) which now holds Logility as a wholly-owned subsidiary. Logility’s flagship product is called Logility Voyager Solutions. Logility has traditionally supported the upper mid-size and tier 1 segment of the marketplace as part of its roster. Logility also owns Demand Solutions as a wholly-owned subsidiary focused on the small and mid-size global markets.

Market Readiness Score: 33 Average Score: 32 Value Delivered Score: 47 Average Score: 52

Category of Solution Logilility has an S&OP solution as part of a best-of-breed SCM suite solution. Products include Logility Voyager Solutions – Demand Chain Planning, Supply Chain Planning, Sales & Operations Planning, Manufacturing

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Planning, Transportation Planning and Management and built-in Performance Management.

Observations Some important points to note about Logility by customers and prospects that want to maximize value through Logility’s solutions are as follows: •

Strong demand management capabilities and gaining traction on the supply side. Logility customers have benefitted from the strength and flexibility in forecasting that the Logility Voyager solution provides. However, the Logility customers surveyed had less experience with the supply side applications but reported strong results in managing the tradeoff of inventory investments with customer service levels.

•

Strength in distribution-intensive make-to-stock markets. Logility’s heritage has been in the distribution-intensive sectors like consumer sector, apparel/footwear, durable goods, wholesale distribution and process manufacturing. Logility has several customers in the consumer industries, which leverage the portfolio of demand planning methods and service-level and replenishment models including collaboration and S&OP.

•

Breadth of solution. Logility provides a great variety of solutions when it comes to solving S&OP related challenges in its core industry verticals: demand management, inventory management replenishment planning, collaborative planning with trading partners, manufacturing planning and performance management, as well as attribute-based planning for new product introductions.

•

Packaged applications and a lack of customization. Logility’s core focus is the upper mid-size and tier 1 global companies (Fortune 1000). Its solutions are packaged to support these sectors in distribution intensive markets. This provides a positive improvement on the key metrics for their customers and quick implementations. However, the result is that larger highly-complex enterprises that desire customization in markets like make-to-order and semi conductor are not markets Logility targets.

From a market readiness perspective, the packaged nature of Logility software solutions allows customers in its core industries to implement the solution quickly and gain quantifiable business ROI. Logility has also partnered with consulting solution providers like Oliver Wight and Plan4Demand in the S&OP space to perform change management. Logility’s customers also have reported high levels of customer satisfaction and retention. Logility is financially and organizationally stable and has performed well in recent times despite the economic turbulence as exemplified by publicly available financial data. Logility Voyager Solutions should be shortlisted by any mid to large-size manufacturer that is considering an S&OP solution to support its efforts. Industries that should strongly consider Logility are process, discrete,

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consumer electronics, consumer and wholesale distribution. Industries that should be more cautious about selecting Logility are make-to-order and semiconductor. Distribution-intensive companies should definitely consider Logility Voyager Solutions, since it has a good track record in this sector.

JDA Overview

AXIS Benchmark: JDA

JDA is a provider of global supply chain planning, retail and merchandising, and supply chain execution optimization solutions. It specializes in solutions for retail, CPG, and process manufacturing industries (primarily for Tier 1 and Tier 2 companies). JDA's approach has been to provide packaged applications that are highly vertical-specific and address complex problems. JDA has completed 10 acquisitions over the past 10 years, the last and the largest being Manugistics in July 2006 ($211 million).

Market Readiness Score: 33 Average Score: 32 Value Delivered Score: 46 Average Score: 52

Category of solution JDA has S&OP solutions in an SCM best-of-breed solution. Products include Demand Management, Collaborate, Supply Chain Planning, Inventory Optimization and Executive S&OP Suite.

Observations In terms of Value Delivered, JDA received a below average score, meaning that JDA’s customers have gained average to below average improvements in those key metrics detailed in Chapter One. JDA’s customers can maximize their value delivered by leveraging the following positive aspects of the JDA S&OP solution: •

Strong demand management capabilities and gaining traction on the supply side. JDA’s customers have benefitted from the heritage that Manugistics had in Collaborative Planning Forecasting and Replenishment processes for its CPG customers. Due to its focus on CPG, however, JDA is not as strong with respect to the rough cut capacity planning. Though there are examples of customers of IDA who have used JDA’s advanced capacity planning and optimization capabilities to enable their S&OP process.

•

Strength in consumer / process. JDA’s heritage has been in the retail sector and Manugistics was strong in the consumer industry sector. While JDA has several marquee customers in the consumer industries, it has opportunity to improve its traction in the discrete manufacturing and high-tech sectors. JDA is now currently focused on improving its solution for the discrete manufacturing sector.

•

Breadth of solution. JDA provides a wide variety of solution capabilities for solving S&OP-related challenges in its core industry verticals: pricing, demand management, inventory management, and merchandise planning. JDA also provides depth in the areas of product management, scenario management, capacity management, financial appraisal and dashboard management review for executing S&OP processes.

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“We are using the Manugistics Demand Planning product for coming up with the statistical forecasts. Ours is a seasonal business and hence it is important to obtain a good time series forecast first. Then we take the output into the JD Edwards PDP module to come up with the constrained plan.” ~ Director of Supply Chain, Food / Beverage Manufacturer

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•

Packaged applications. JDA’s core focus is the upper mid-size and lower large-size company, and its solutions are packaged to support these sectors. This provides an improvement on the key metrics for their customers. Process excellence at the executive S&OP stage is critical to balance supply-demand and finance. The metric that is impacted by this is the gross profit margin.

The JDA Supply Chain Planning Suite and Executive S&OP Workbench solution are built on a best practice workflow that can be enhanced with customer specific data elements, user defined task lists and customized configurable capabilities. In addition the JDA Executive S&OP Workbench was launched in Q4 2008 and is “generally available.” This solution was built in collaboration with Oliver Wight. Looking to Market Readiness as a measure ensuring customer success, JDA has received an above average score based on both its focus on quick deployment as well as its global delivery capability. The packaged nature of the JDA software solutions result in the customers in the core industries that they support implementing the solutions quickly and gaining ROI sooner. JDA has also partnered with some consulting solution providers in the S&OP space (like Oliver Wight) to perform change management. There are two aspects that need to be mentioned regarding the global deployment capability of JDA. The first is the strong presence in Europe. The second is the presence of both a large solution center in India (Hyderabad), where consultants can be engaged to support global S&OP implementations, and the presence of a development organization in India to ensure R&D at a lower cost. JDA is able to support managed services engagements through its India solution center. The financial performance of JDA has been good in recent times and it should be part of the short listing process. JDA’s solutions should be shortlisted by any large size manufacturer. Industries that should strongly consider JDA are process and consumer. Companies that should be more cautious about selecting JDA are those in the high-tech and discrete industries. JDA’s good track record with mid-size companies should warrant consideration by enterprises in that sector.

IBM (Cognos) Overview IBM is one of the largest technology services and consulting providers in the world. IBM recently acquired Cognos, a large provider of Business Intelligence solutions. Companies leverage IBM to enable their S&OP processes in multiple ways: they get consulting services through IBM Global Business Services, they can obtain network design solutions through the newly acquired ILOG / Logictools organization, or they can obtain Cognos’ S&OP blueprint to get visibility into S&OP related metrics.

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AXIS Benchmark: IBM/Cognos Market Readiness Score: 29 Average Score: 32 Value Delivered Score: 45 Average Score: 52

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Category of solution IBM provides standalone S&OP solutions. Products include Logictools network design, Cognos S&OP blueprint and the underlying BI platform

Observations IBM’s Value Delivered score, as a measure of customer performance, was below the average due to its customers average improvement level across the Chapter One metrics. Improvements in these metrics for IBM customers can be attributed to IBM’s strong BI platform to generate metrics and the ability to support the executive S&OP process through dashboards. Some of the issues that may be reducing the users’ score are: lack of optimization capabilities, and weak functional capabilities for enabling endto-end S&OP process. Top performers in Aberdeen research are two-times as likely to leverage a BI solution to enable the S&OP process. Cognos provides a dashboard that allows key S&OP metrics to be captured and reported for executive management. Through a real-time dashboard, Cognos provides executives with visibility into the five key metrics that are determinants of S&OP success. However, Cognos is not a supply chain planning solution. It does not support demand forecasting or the ability to model constraints. In order to impact the key metrics associated with S&OP success like RONA, forecast accuracy and customer service levels, constraint management and optimization capabilities are essential. Turning to Market Readiness, Cognos garnered a lower than average score, with positive contributions provided by IBM global services providing consulting services for S&OP, as well as its partner network and global presence. Some of the areas of concern that end users have to be aware of are its dependence on ERP and SCM suite players for data, lack of awareness of Cognos as a provider of S&OP solutions, and a lack of industry vertical strategy. S&OP is primarily a process and change management initiative. IBM Global Business Services is a strong organization with good domain knowledge across different industry verticals. In addition, Cognos partners with other supply chain software providers like Infor, SAP and Oracle. The global presence of IBM is also advantageous for Cognos to expand their solution adoption. From a market readiness standpoint, end users have to be aware during short-listing that S&OP processes require significant amounts of data that is available either through ERP solutions or through SCM suite software. BI solutions are not the system of record for the data. This may deter some end users from adopting the Cognos solution due to integration concerns. End users also may think of Cognos as more of a toolset provider rather than a solution provider. Their thoughts will be somewhat justified until Cognos is able to provide deep industry vertical templates. End users who are considering Cognos should request that product management show their product roadmap at an industry vertical level.

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In conclusion, Cognos’ S&OP solutions should be shortlisted by any manufacturer that wants to leverage a general purpose BI platform to enable the S&OP process. Cognos is good at managing the Executive S&OP process, while weak with respect to supply-demand balancing and optimization.

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Specialist S&OP Solution Providers Snapshot Supplement The vendor snapshots in this section include vendors that provided the requisite Market Readiness information but did not achieve adequate market visibility within the context of Aberdeen surveys to create a Value Delivered score. However these solution providers are specialist players in the S&OP space and can be either pure play S&OP players or APS solution providers that support the S&OP processes. These solution providers bring unique capabilities of their own in terms of customers and success stores and must definitely be shortlisted based on the criterion outlined in the following section.

Adexa Overview Adexa was founded in 1994, is headquartered in Los Angeles, California, and has a presence in Asia and Europe. Adexa is an end-to-end SCM suite solution provider. Their solutions provide planning, modeling and collaboration technologies in a web based solution.

Observations Adexa has developed deep supply chain functionality, specifically in the areas of demand forecasting, supply planning & inventory management through its implementations at key high-tech and discrete manufacturers. Adexa has also developed unique IP through the attribute-based planning approach towards modeling and optimizing supply chain problems. Adexa was one of the original players in the industry who coined the concept of Profit Driven Supply Chain planning and developed a complete set of solutions around it. Adexa has remained a niche and specialized SCM suite provider and does not have a long term partnership strategy with either an ERP player or a consulting organization. Adexa has also not reached the scale needed to obtain a global delivery model, though it has gained a large customer base in Japan. Adexa is strong in the high-technology, discrete, consumer, and process industries due to their focus on attribute-based planning, which can model a diverse set of business environments.

Aspen Technology Overview Based in Burlington, MA, Aspen Technology provides supply chain management software designed specifically for process industries. AspenTech’s best-of-breed “process optimization” tools also include

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engineering and plant operations software products, sold under the aspenONE® brand. AspenTech’s annual revenue is over $300M.

Observations Aspen Technology has a large customer reference base and depth of functionality in the process sector. AspenTech has a supply chain management solution that contains Collaborative Demand Management, Supply Chain Planning and Demand, Supply and S&OP Analytics. The solution also possesses significant depth of functionality in terms of enabling the S&OP process. In the past, Aspen Tech customers wanting “out of the box” supply chain solutions had to make significant customizations. However, in the last few years the company has added new versions that provide out-of-the-box functionality to support standard S&OP business processes, still maintaining the capability to configure the applications to meet special business requirements. Some of the service partners of Aspen Technology that implement the S&OP solutions are: IBM, Delta Software, Fujitsu, TimeCommerce and Accenture.

John Galt Overview John Galt was founded in 1996 and is headquartered in Chicago, IL. John Galt delivers forecasting and inventory management solutions for consumer supply chains. John Galt has two different solutions: the ForecastX wizard and the Atlas Planning suite. John Galt serves various industries like apparel, automotive, consumer goods, food and beverage, etc.

Observations John Galt provides multiple solution enablers for the S&OP process: the ForecastX (a spreadsheet based solution) wizard that end users can download and install, the Atlas Planning suite that includes an enterprise scale demand planning, supply planning and S&OP module. This allows end users to scale their usage of John Galt over a period of time. In addition John Galt is strong in forecasting and its solutions positively impact forecast accuracy. A natural and recent area of IP expansion for John Galt has been into POS forecasting, which is suitable for the consumer industry sector. John Galt also provides an inventory planning module that can do constrained supply planning.

Jonova Overview Jonova, a privately held company based in Seattle, WA, specializes in value management with Integrated Business Planning and Performance Management software. Jonova’s solutions allow companies to model their business in terms of supply, demand, product and finance to optimize their

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S&OP and other strategic plans holistically. Jonova has a strong track record in the pharmaceuticals and high-tech markets.

Observations Jonova software provides a collaborative scenario planning environment which can model complex value chains and perform holistic simulation, in order to optimize supply, demand and product based on financial contribution. Their unified approach to both optimization and simulation is a key innovation provided by Jonova. Jonova does not intend to be a generic end to end S&OP solution provider. Instead, they are among several other pure play S&OP vendors that are working to fill gaps between executive strategy and tactical execution, which the industry terms as Integrated Business Planning or Executive S&OP. Jonova takes a top town approach to strategic modeling, adding levels of details as necessary to evaluate a range of options. The models have a network/flow understanding of the extended enterprise that scales for inclusive cross-functional, partner and multi-site planning. This objectoriented macro/aggregate planning technique enables ease of data collection and speed of modeling so that results are easy to compare and contrast on any metric To date, Jonova has focused primarily in Life Sciences and High Tech. It has to be noted at the strategy level industry specific differences often blur and hence Jonova’s solutions should be adaptable to other industries as well. Currently, Jonova does not partner with any specific ERP company but has the ability to integrate with all the major players due to simple nature of integration involved.

Kinaxis Overview Kinaxis was founded in 1995 and is based in Ottawa, Ontario, Canada. It has a Software-as-a-Service (SaaS) solution (RapidReponse) that performs rapid and profitable balancing of demand, supply and product. The solution has a collaborative approach to enabling supply chain organizations to obtain supply chain visibility, demand management, and S&OP. The key sectors that it plays in are A&D, consumer products, high-tech, and industrial. Kinaxis is a stand alone S&OP solution and Integrated Business Planning solution provider. Its niche is in the area of Response Management – the ability to enable more real-time S&OP, rather than being focused on a monthly process.

Observations Kinaxis has a light-weight and modern product architecture which is SaaSbased. In addition, the solution is not a black box, and allows end users to have visibility into the impact of their actions through simple-to-use process workflows. Kinaxis plays in the unique space of “Response Management” and focuses on bridging the gap between the S&OP plan and the actuals. © 2009 Aberdeen Group, Inc. All rights reserved.

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Response Management solutions operate in real-time, allowing for rapid insight into the impact of a given change or proposed response to change. These solutions complement existing APS and ERP solutions in place. Response Management process is a distributed process where people collaborate and use human judgment to quickly come up with the right course corrections to make in light of unexpected events. Kinaxis also has a strong customer reference base in the high-technology and discrete manufacturing sector, as well as a strong presence in Japan and other regions of Asia. Kinaxis is only one of the few pure play S&OP players which can support the multi-tenant SaaS model.

River Logic Overview Based in Dallas, TX, River Logic is a provider of Integrated Business Planning (IBP) solutions. River Logic provides an advanced modeling solution that gives users the ability to model the business in terms of supply, demand, and finance, and to optimize the S&OP plan holistically.

Observations Key highlights of River Logic’s offering include: a partnership with Microsoft, a rich modeling environment for true Integrated Business Planning, and high, fast ROI reported by end-users. River Logic is a Microsoft Gold Certified Partner, and has embedded their solutions into the SharePoint platform. This expands River Logic’s reach into Microsoft’s customer base. Additionally, River Logic provides a rich, natural language-based modeling environment which can model complex supply chains and perform a holistic optimization of supply, demand, and finance. The solution is built on the product called Enterprise Optimizer, which simultaneously employs activity-based modeling, constraint-oriented process modeling, and financial modeling and which provides extensive what-if and scenario management capabilities. Users having deployed River Logic’s technology have reported a rapid ROI. End-users who are evaluating River Logic should ensure the financial viability aspects of the company carefully, given its private ownership and the startup nature of the firm; however, the rapid ROI, the partnership with Microsoft and the innovative nature of the solution should mitigate these concerns. End-users should know that the technology lacks the core S&OP capability of demand forecasting. River Logic has recently announced a partnership with Synectics Group to develop a trade promotion optimization solution, which will integrate with the demand shaping aspect of S&OP, allowing users to optimize the plan to multiple objectives (revenues, volume, minimum cost, market share, etc.) River Logic does not intend to be a generic S&OP solution provider, but targets the Executive S&OP space, with a focus on policy.

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Organizations that are looking for a solution for long term strategy planning, while balancing supply, demand, and finance and providing optimization, should definitely evaluate River Logic.

Smart Software Overview Smart Software is an SCM software suite provider specializing in demand forecasting, planning, and inventory optimization. It is based in Belmont, MA, and was founded in 1984. It targets the mid-size sector, though several of its customers are subsidiaries or business units of larger companies.

Observations The challenge of forecasting intermittent or sporadic demand is increasingly pronounced in companies today. Smart Software has a specialized solution available to solve this problem and several of its existing customers chose its solution for this reason. Its solutions are also lower-cost compared to the market average, and are easy to deploy and implement. Smart Software is a demand forecasting specialist and hence its customers primarily leverage it for the Demand Review process rather than the supply planning or supply-demand balancing. In addition, it is North Americancentric, does not have the global reach to support larger markets, and does not have partners that can bring this global reach for them.

Steelwedge Overview Steelwedge is a stand-alone S&OP solution provider based in Pleasanton, CA. Its key focus is to provide a collaborative forecasting functional solution and the Executive S&OP layer for Integrated Business Planning while integrating with existing ERP, APS, CRM and BI software. Steelwedge also provides a SaaS based deployment option in addition to the on-premise approach.

Observations Steelwedge is an up and coming standalone vendor focused on providing a platform to enable Executive S&OP and collaborative forecasting for Sales, Marketing, Finance and Demand Planning. Some of the highlights of the Steelwedge solution are: SaaS based deployment, spreadsheet enabled architecture, ERP integration and strong discrete / high-tech industry support. Some of the areas that end users evaluating Steelwedge should be aware of are its focus in helping companies manage pricing and revenue based forecast, collaborative sales forecasting that integrates sales opportunities from CRM applications, and its statistical bill of materials solution designed to help complex manufacturing companies generate component based forecast. In addition, Steelwedge offers an entry level

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preconfigured SaaS based solution designed to help companies get up and running in a compressed implementation timeframe. Steelwedge has a light-weight and modern product architecture with the ability to have spreadsheets as the front end with a secure database back end. Given that 80% of companies leverage spreadsheets in one way or another during S&OP processes, it is a useful feature to be able to create custom S&OP workflows in a secure excel based architecture with planning and BI capabilities. In addition, Steelwedge is Netweaver certified and provides out of the box integration with SAP. Steelwedge also has a strong customer reference base in the high-technology and discrete manufacturing sector. The solution from Steelwedge is innovative and is a very strong S&OP pure play solution. End users should be aware that Steelwedge is specifically designed for collaborative sales forecasting and Executive S&OP. The end user should have existing ERP backbone and APS software to enable the basic execution and tactical processes. Steelwedge’s utility is in enabling the medium to long term Executive S&OP process and supply-demand matching through a purpose built platform that combines BI, Collaborative planning and workflow with a secure central database. End users who are evaluating Steelwedge should be either looking for a collaborative sales forecasting solution, demand planning for complex products or Executive S&OP platform to compliment existing ERP and APS capabilities. Look for Steelwedge to expand its partnerships with ERP and APS vendors looking to compliment their offering with a pure play Executive S&OP solution.

Supply Chain Consultants Overview Founded in 1993, Supply Chain Consultants (SCC) is a supply chain management software and services company with headquarters in Wilmington, DE, and European operations in Antwerp, Belgium. SCC’s Zemeter software helps manufacturers plan demand, manage inventories, plan production and replenishment, and schedule operations. Supply Chain Consultants is really more of a software company than what their name suggests. Its focus is on the process industry sector due to its historical evolution as an offshoot of Aspen Technology. Supply Chain Consultants provides S&OP solutions in a best-of-breed SCM suite. Products include Zemeter Demand Forecasting, Zemeter Supply Chain Planning, Zemeter Performance management, Zemeter Azimuth, and Zemeter Inventory Analyzer.

Observations Supply Chain Consultants provides a full suite of supply chain products – demand management, supply planning, inventory planning, and performance management. These products have deep functionality that supports the requirements of the process industry.

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Recently, Supply Chain Consultants released the Azimuth solution as a means for an organized meeting that does not revolve around spreadsheet analysis. It is a lightweight tool, which differentiates this product from the other heavyweight products that are not suitable for the interactivity that is needed for driving S&OP. Furthermore, Azimuth’s S&OP solution is bringing into the planning meeting a product that provides scenario analysis. Process manufacturers, including chemical, food, and beverage companies, should consider SCC due to its domain expertise in these industries. Process manufacturing companies that want to enhance their S&OP processes in order to do a better job of improving corporate performance should explore SCC and its Azimuth solution. Companies that have implemented SAP R/3, Oracle, or other ERP systems in a process manufacturing environment should explore using Azimuth for running their S&OP meetings. Discrete manufacturers that have requirements for strong references and domain knowledge base within their industries should consider alternatives to SCC.

Symphony-Metreo Overview Symphony-Metreo is part of the Symphony Technology Group. The Symphony Technology Group has revenues of over $2.5 B USD, and over 14,000 employees. The various divisions within the Symphony Technology group are: Capco, which is a financial services consulting and BPO company; Aldata, which is providers supply chain software for retail, wholesale and logistics; IRI, which is a market information analytics company; Lawson, which is an ERP provider for the mid-market; Symphony Services, which is a BPO for product development, and; Symphony-Metreo, which is an enterprise pricing and S&OP solution provider. Symphony-Metreo provides a stand alone S&OP solution with pricing integration, and can be categorized as a BI solution provider.

Observations Symphony-Metreo is formed out of the merger between SymphonyRPM and Metreo, each of which contributed its own strong points. Symphony provided a BI toolkit that could be used to build applications for performance management, and Metreo brought in pricing capabilities that were implemented in the manufacturing sector. The merger of the two companies held promise, some of which has not yet come to fruition. The advantages are many, such as rich metrics and dashboards for S&OP, and integration between S&OP and pricing. These advantages have provided an Integrated Business planning platform, and a partnership with IBM Global Business Services for S&OP process and change management. The areas that end users should be cautious about are the lack of a large number of customer references (though their existing customers like Linksys have provided good feedback) who have enabled the S&OP process with Symphony-Metreo, and the lack of end-to-end S&OP capabilities. However, end users who are interested in exploring pricing related angles to S&OP should consider Symphony-Metreo as one of the few providers that has this capability. © 2009 Aberdeen Group, Inc. All rights reserved.

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Appendices Aberdeen AXIS Methodology About this Aberdeen AXIS Focused on Aberdeen’s Supply Chain Management research, this AXIS Report is based on 1100 respondents from 5 benchmark studies conducted between Q3 2007 and Q3 2009. Solution providers covered in this report were asked in Q2 2009 to complete an extensive questionnaire regarding their company’s overall status and operational performance. Follow-up interviews were conducted with the evaluated vendors’ customers in MayJuly 2009.

About Aberdeen Since 1988, Aberdeen's research has been helping corporations worldwide become Best-in-Class. Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide organizations with the facts that matter — the facts that enable companies to get ahead and drive results. That's why our research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of the Technology 500. As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information – Opportunity – Insight – Engagement – Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, please visit Aberdeen Group at www.aberdeen.com or call (617) 854-5200. To learn more about HarteHanks, please call (800) 456-9748 or go to www.harte-hanks.com.

The Aberdeen AXIS Methodology The Aberdeen AXIS is an objective and fact-based vendor assessment methodology designed to assist organizations in making technology purchasing decisions. The Aberdeen AXIS assesses vendors using two criteria: 1) Best-in-Class status (Value Delivered) based on key performance indicators of the vendor’s customers, drawn from Aberdeen’s domainspecific body of primary fact-based research; and 2) Market Readiness of the vendor organization determined by over 250 evaluation criteria, including: vendor questionnaires, public records, vendor briefings and customer interviews. •

Vendor Selection – Vendors appearing on an AXIS have been identified by Aberdeen and the marketplace as having a relevant solution.

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•

Vendor Omission – Vendors may not appear on an AXIS for typically one of three primary reasons: 1) the vendor failed to supply requisite data for analysis; 2) the vendor failed to have sufficient market representation as part of the analysis (i.e. insufficient number of customers identified the vendor as a provider); or 3) the vendor’s solution or service did not align with the particular AXIS topic.

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Data Collection – Data for the Y-Axis (Value Delivered) is extracted from relevant Aberdeen benchmark research reports published in the proceeding twelve months (typically). All of the benchmark reports are predicated on Aberdeen’s PACE methodology, using primary field research in which end-users are polled via standardized survey. Information collected is analyzed using Aberdeen’s formulaic approach to determining Best-in-Class performance. Data for the X-Axis (Market Readiness) is a by-product of a vendor-fielded questionnaire containing over 200 key questions, public records, customer interviews and vendor briefings. A weighting algorithm, maintained in confidence to prevent response gaming, is applied to determine respective vendor scores.

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AXIS Recommendations – The relative positions of the vendors on the AXIS, as well as the insight provided in the report, represent an assessment of the vendor score for Market Readiness and Value Delivered, interpreted via published methodology and analyst insight.

An Aberdeen AXIS is published typically once a year for each of the 22 research practices covered by Aberdeen.

Further Reading • • • • •

Technology Strategies for Integrated Business Planning; July 2006 Executive Sales and Operations Planning: Process and Technology Strategies; June 2007 Sales and Operations Planning: Aligning Business Goals with Supply Chain Tactics: June 2008 Making Integrated Business Planning Payoff: Balancing Supply, Demand and Finance; Dec 2008 Sales and Operations Planning: Integrate With Finance and Improve Revenue, To be published July 2009

For information on updates or publication schedules, please contact: [email protected]. More information about Aberdeen AXIS is available at: http://axis.aberdeen.com Visit the Aberdeen Supply Chain Management Research library: http://www.aberdeen.com/channel/scml.asp Author: Nari Viswanathan, Vice President/Principal Analyst, [email protected]

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