Companies seeking to implement Oracle's Demantra Demand Management need to understand the service provider landscape and deployment options available to ensure project success.

• Traditional deployment models — that is, licensed applications implemented at the client's site using project-based consulting resources — still dominate for Oracle's Demantra Demand Management implementations. Gartner does see, however, some early interest in ongoing services that align with a retainer based on an on-demand consulting model. With this model, a services contract specifies a number of hours per week or month during which Demantra functional consultants are available for virtual client support. Note that this service contract is for skilled functional Demantra resources, not help-desk support.
• Companies use either a full-service, large consulting and system integration firm or two different service providers, with one focusing on Demantra's implementation and integration and the other on business process improvements, best practices and change management. Enterprises that use two providers take on a larger program management role.

• Choose a provider that best matches your primary need. Is it a specialist that only performs functional and technical implementation, or is it a more comprehensive consulting and system integrator (C&SI) firm that provides implementation as well as program, business process and organizational change management? Providers that are extremely skilled functional and technical implementers of Demantra software usually don't have the expertise or bench to support significant business process change.
• Use the service provider's offshore resources to provide periodic business process support or as a way to increase your capabilities in demand planning without hiring more staff. The majority of providers that participated in this research deliver Demantra-based business services through onshore and offshore resources.

Most Oracle Demantra service providers implement Demantra products in a traditional, on-premises model: The client licenses the software, and the provider's resources implement and integrate it at the client's location.

Enterprises that elect not to use large consulting firms that offer application implementation, integration, business process redesign and change management will likely need assistance from two types of providers: one for process, training and change management expertise, and the other for Demantra implementation and integration expertise.

Many Gartner clients ask about Oracle's Demantra Demand Management application and how to deploy it effectively. They also must decide how best to use the product to better support demand-planning business processes on an ongoing basis. Since our clients have specifically asked about the consultants and service providers with which they should work, we evaluated the ones that implement and/or manage Oracle's Demantra Demand Management through traditional — that is, on premises — and alternative — through software as a service (SaaS) or BPO— deployment models:

• On-site implementation — On-site consultants perform the services, potentially using the service provider's offshore resources.
• Delivered as a service — The service provider manages the application off-site, with the users accessing functionality via the Web.
• Business process outsourcing (BPO) delivery — The service provider implements and runs the product off-site, using Demantra's product to generate demand plans.

Gartner contacted 24 providers and asked them to answer our questions (see "Appendix A: Research Approach and Service Provider Questions"). We identified these companies based on our experience in demand planning as well as Oracle's suggested list of service-provider partners.

Eighteen service providers participated and confirmed their Demantra Demand Management capabilities: Accenture, Bristlecone, Capgemini, Clarkston Consulting, enrich IT, Fujitsu, Genpact, HCL Technologies, Hitachi Consulting, IBM, Infosys, Inspirage, MetaChain, NexInfo, Oracle, Supply Chain Fusion, Tata Consultancy Services (TCS), and Zensar. The other six service providers from the original list of 24 either didn't respond to our request for information or provided data insufficient for inclusion: Cognizant, Daz Systems, Deloitte, Optimum Solutions, Trinamix and Wipro

Figures 1 and 2 provide an overview of the Demantra service providers that actively participated and provided sufficient responses. Summary overviews of these company and their respective capabilities concerning Demantra Demand Management will appear in future Gartner research.

Traditional delivery models continue to dominate. In fact, we estimate that less than 10% of the market has embraced SaaS or BPO as an option for demand planning.

Although SaaS and formal BPO arrangements are proving slow to catch on, clients nonetheless are seeking nontraditional engagements with providers. For example, they're requesting periodic or ongoing access to functional expertise outside implementation and post-implementation support services common in managed services contracts. One service provider, in fact, is currently negotiating an agreement with a vertically integrated retailer for ongoing access to functional experts. The agreement will be defined by the total hours per week or month when the client's demand planners can interact with the service provider's functional experts.

Across the 17 participating service providers, the number of trained and experienced Demantra consultants ranged from six to more than 100. Accenture, IBM, Oracle and TCS reported the largest number of experienced Demantra demand-planning (functional and technical) consulting resources. From the specialist segment of the market, Inspirage is noteworthy, with more than 20 consulting resources and more than 10 live customers. Compare this with IBM and Accenture, which reported 20 and six implementations, respectively.

Consultants and service providers both large and small either have or are adding offshore resources to support demand-planning implementations and ongoing demand-planning BPO services. Four of the offshore-led firms — Bristlecone, Genpact, HCL Technologies and Infosys — have more than 50 resources for demand-planning BPO, managing separate applications for each customer. Of those four service providers, only Bristlecone is currently using Demantra as its demand-planning BPO platform.

The majority of BPO service providers have been slow to invest in demand-planning BPO because manufacturers and retailers tend to have unique facets of their demand-planning processes, which they see as core to their business. There's also minimal labor cost savings or arbitrage for demand-planning BPO, making the benefit of outsourcing demand planning in isolation less attractive to clients and service providers.

Two of the customer references using Demantra specialist firms Inspirage and Zensar Technologies indicated that offshore resources were involved in the implementation and ongoing support. One reference even described how an offshore resource participates in weekly calls with business users via conference call.

Four customers and four service providers said they experienced performance and scalability issues with Demantra. The core issue concerns the level of granularity for the supply chain model (e.g., forecasting too many items and too many locations, such as store-level forecasting for a large retailer). The customers and service providers that raised the performance and scalability issues agreed that Oracle needs to provide more guidance regarding the supply chain models and configurations that can and can't be supported effectively by the application.

Demand planning will continue to be delivered predominantly through traditional deployment models in the short term to midterm, with Gartner estimating that fewer than 10% of Oracle Demantra implementations are now delivered in a SaaS or BPO model. However, we do expect companies to engage with service providers more frequently for single-instance management and hosting services within the next 12 to 18 months as a way to reduce IT costs and complexity.

Once retailers and manufacturers have outsourced applications, their demand for periodic or ongoing access to domain-specific expertise usually increases, and they look to their outsourced application partners first. We expect firms with strong consulting expertise to provide these services in conjunction with application services as a way to differentiate their offerings.

Expect additional software and service delivery models to be offered by or powered by Oracle. Bristlecone and enrich IT are BPO service providers for Oracle Demantra today. Both firms also provide BPO services for the larger Oracle Advanced Supply Chain Planning suite. In addition to Bristlecone and enrich IT, MetaChain offers BPO services for Oracle's supply chain planning products, and three other service providers indicated they would be interested in delivering a Demantra and Oracle Advanced Supply Chain Planning BPO service to the market within the next 18 months.

Although adoption of alternative software and service delivery models is slow in demand planning relative to the supply chain management (SCM) market overall, Figure 3 shows that alternative delivery models represent 30% of all supply chain software deployments — that's three times more than demand planning. This is likely because other domains within SCM are more standardized and transactional in nature. For example, transportation management and global trade management are two areas where SaaS adoption has been well received.

The research process Gartner used included three aspects:

• We spoke with Oracle's product management and alliance management to discuss service and application delivery model trends and asked for assistance with identifying Demantra service providers (both consultants and BPO providers).
• We built a request for information (RFI) and e-mailed it to the 24 service providers representing the overall list as identified by Gartner and Oracle.
• When possible, we conducted a phone briefing and/or sent follow-up e-mails with the service providers that responded to the RFI.

Where feasible, we also spoke to references from each responding service provider. Providing references was optional, since the primary purpose was to identify the Demantra service providers, what Demantra services they offer and how many Demantra resources they have.

Below is the list of questions we e-mailed service providers for the RFI. We encourage enterprises to use this report and the questions listed below in Demantra Demand Management service provider evaluation and selection processes.

• How many dedicated full-time employees do you have who are qualified (that is, trained and experienced with at least one client project) to implement Demantra?
• Please describe the typical life cycle of an implementation/integration engagement.
• How many implementations has your firm performed?
• How many are live?
• Are they referenceable? If so, may we speak with one?

• Are clients asking for Demantra to be delivered via SaaS?
  • If yes, what portion or percentage of customers wind up selecting SaaS? If no, why do you think this is so?
• How many full-time employees do you have supporting the delivery of Demantra via SaaS?
• How many Demantra SaaS customers do you have?
• Are they referenceable? If so, may we speak with one?

• Are clients interested in outsourcing demand planning?
  • If yes, please elaborate and provide details regarding client interest.
  • If no, why do you think this is so?
• How many full-time employees do you have supporting demand-planning BPO?
• Do you plan to form or grow staff in demand-planning BPO services? If yes, by how much within the next 12, 24 and 36 months, respectively?
• How many demand-planning BPO customers do you have?
• Are they referenceable? If so, may we speak with one?

Gartner contacted 24 service providers of various sizes and requested information on their respective Oracle Demantra practices. Of the firms responding, we afforded them the opportunity to brief us on their service offerings and strategies. We also spoke with end-user references if available.