Vendor Panorama for Trade Promotion Management in Consumer Goods

Key Findings

• Gartner believes that trade spending as a percentage of revenue is slightly more than 20% (up about 0.5% per year since 1985), with some categories like frozen/refrigerated trending higher than 30%. This is substantiated by industry organizations such as the Promotion Optimization Institute. Gartner does not expect this trend to subside without a game-changer like optimizing capabilities to shift the focus from extracting trade funds from manufacturers to better predicting promotional outcomes and using trade funds to drive improved performance for both manufacturers and retailers.
• An informal poll of 126 trade promotion management (TPM) users at an industry event in May 2012 revealed that approximately 80% do not have sufficient data integration to automate the postevent analysis process.
• An estimated 40% of consumer goods (CG) companies still use spreadsheets to manage trade promotions. There is no clear pattern indicating why they have put off automation. The bulk of these are Tier 3 companies, along with some Tier 2 companies.
• Integrators and service providers are purchasing TPM/trade promotion optimization (TPO) solutions to capture software and ongoing software as a service (SaaS) revenues. Some of these acquisitions makes sense and are delivering value, while others appear to be "me too" reactions by companies that feel compelled to make acquisitions to keep up with competitors.

Recommendations

• Don't overlook data integration, as it is key to conducting postevent analysis and predicting promotional outcomes. But don't assume that purchasing a TPM or TPO solution from an ERP vendor will deliver easy integration. Users consistently tell us that integration was more complex than they had expected.
• Tier 1 companies (those with more than $1 billion in revenue) should evaluate a combination of SaaS and on-premises solutions to determine whether they can meet their business processes with configuration capabilities in SaaS. If that doesn't work, organizations should evaluate customizing an on-premises solution while considering the associated costs involved.
• Tier 2 and Tier 3 companies should focus on SaaS or managed service offerings, as on-premises and highly customized solutions typically cost more than what these companies are willing to pay.
• Enterprises using spreadsheets to manage trade spending should consider automating these processes as soon as possible. With trade spending continuing to increase and the need for strong analytics as a differentiator, it doesn't make sense to wait.

Market Overview

This report in part replaces the MarketScope covering field sales automation in the consumer goods industry, which was retired in 2011. This research will be accompanied later by a vendor panorama of solutions for retail execution and monitoring. Here, we profile the TPM marketplace and the leading vendors in it to help CG companies use technology to better manage trade promotions.

Market requirements and available offerings remain largely unchanged since the Gartner MarketScope covering this set of technologies was retired. The biggest development is the number of new projects that have been launched since early 2012 as CG companies have realized that they need to improve their ability to execute trade promotions independent of changes in the economy. The vast majority of these companies are embarking on TPM for the first time. Because TPM solutions are mature, there is little advantage to using spreadsheets to manage trade spending. Other developments include:

• The continued emergence of SaaS-based solutions, particularly in Tier 2 and Tier 3 companies, as well as preconfigured on-premises offerings to increase time to value.
• Interest in TPO and continued momentum across the various types of solutions, such as integrated TPM/TPO, bolt-on and TPO stand-alone.
• The lack of effort in developing homegrown TPM or TPO solutions. We don't know of an instance in at least the past seven years when a company built its own TPM solution, except for some that are based on spreadsheets.
• No new market entrants of any significant stature.
• Analytics and data visualization continue to be points of differentiation.
• The acquisition of trade promotion solution vendors by consulting firms as they attempt to expand service and license revenue opportunities beyond supporting initiatives relating to the ERP vendors. This trend started with Accenture acquiring CAS, followed by IBM's purchase of DemandTec. The most recent deal was Wipro acquiring Promax.
• Trend spend rate becoming acknowledged through both client and industry interactions to be above 20% and as high as 30% in categories such as frozen/refrigerated foods.
• No significant TPM or TPO uptake by semidurable and durable goods companies, as their businesses are still suffering in the wake of the economic downturn.

Evaluation Criteria

Company Viability

Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product, and will advance the state of the art within the organization's portfolio of products. A vendor must be able to generate sustainable revenue and profits, and be committed to continued success in this specific sales force automation (SFA) marketplace. We also emphasize financial transparency, regardless of vendor size.

Geographic Strategy

The vendor's geographic strategy is to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries, as appropriate for that geography and market. Geographic strategy also involves a vendor's ability to support companies on many continents and in multiple languages, as well as the vendor having the quantity and quality of clients available to provide references from all three tiers of CG companies. (Tier 1 companies have revenues greater than $1 billion. Tier 2 companies have revenues of between $250 million and $1 billion. The revenues of Tier 3 companies are less than $250 million.) The application of tiering can occur at the corporate level for global deployments or at the region/country level. This is because Tier 1 companies don't necessarily act as such when selecting and deploying solutions at the microlevel, or for a business segment that is relative small compared to the overall organization.

Market Responsiveness and Track Record

This is the ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness.

Deployment Capabilities

Deployment capabilities involve the vendor's demonstrated ability to deliver trade promotion solutions for CG companies through its own implementation or with the help of external service partners.

Market Understanding

This refers to the ability of the vendor to understand buyers' wants and needs and to translate them into products and services. Vendors that show the highest degree of vision listen to and understand buyers' needs and desires, and can shape or enhance those with their added vision. The vendor must have an in-depth understanding of the CG industry and the needs of companies in this market segment, coupled with the ability to act in time to remain relevant and to translate this market understanding into comprehensive functionality and meet customer needs within its geographic scope worldwide.

Vertical/Industry Strategy

This strategy involves the vendor's approach to product development and delivery, recognizing the unique requirements of the geographies and types of CG companies that it serves. Examples of customers include manufacturers from food and beverage to tobacco to hard lines to footwear and apparel. Other examples include the various offerings fully covering the functional footprint within the geography where the vendor operates. A vendor need not cover the globe, but must accommodate variations within its chosen geographies.

The vendor's strategy must include resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.

Partner Leverage

This involves the demonstrated ability to form and execute meaningful partnering relationships across the breath of the offering. Such additions to the product offering — typically transparent to users — are embedded and included in a single contract. Examples include underlying technology, hosting, analytics, predictive models and hardware. The delivery of deployment services is not included in this category.

Company Vision

Company vision refers to the ability to attract and retain personnel who will keep the company relevant and growing. It also involves the ability to articulate and deliver against a vision of where the TPM/TPO space is going in the two-to-five-year time horizon and beyond.

Product Aptness and Flexibility

The vendor's approach to product development and delivery must emphasize differentiation, functionality, methodology and feature sets as they map to current and future requirements. The vendor must possess Web and mobile technology that is scalable and can support internal sales agents and partner sales agents. The data model can support appropriate hierarchies of customers and products — for example, product family, brand and stock-keeping units. The product also supports multiple platforms, such as laptops, tablet/slate devices and ultralight PCs. The vendor's technology can be expanded to integrate with other company legacy solutions, best-of-breed offerings or syndicated data sources. This criterion also includes important enablers, such as order and data management, content management, contract management, reporting and analysis, and full online/offline capabilities.

Delivery Flexibility

Delivery flexibility refers to the vendor's ability to provide its solutions in multiple fashions, such as on-premises, third-party-hosted and SaaS.

TPM Completeness

The vendor must enable five key customer planning functions with a complete solution that meets market requirements for each function:

• Promotion planning and budgeting
• Predictive modeling/optimization
• Promotion execution and monitoring
• Settlement
• Postevent analysis

TPO Completeness

This refers to the ability to predict promotional outcomes with:

• Constraint-based optimization
• Optimization through iterative scenarios
• "Best" promotion option
• Multiple promotional factors, including timing, frequency, duration, pricing, promotion type, and other capabilities specified by users
• Cannibalization and halo effects

User Experience

This includes user interface, navigation and ergonomics for moving throughout the promotional cycle.

Analytical Capabilities

Analytical capabilities involve:

• Graphics: The integration of graphical representations and the ability to obtain additional information through hovers or drill-downs.
• Dashboards: User-configurable lenses that enable the monitoring of multiple dimensions of the business and provide access to the underlying functionality.
• Alerts: The users' ability to specify conditions that will result in a notification through email or text message.
• Reporting: Predefined reports or embedded report writers.
• Query: Embedded technologies such as online analytical processing (OLAP) to enable data analysis. Query also involves the ability to export to Excel, manipulate the data and bring the results back into the application.

Product Vision

This is the ability to articulate future product needs and have them included in the product when early adopters in the market are prepared to embrace them.

Configurability

Configurability is the ability to accommodate nuances at various user levels without having to write code. Special consideration is given to solutions that allow nontechnical personnel to manage various levels of configuration without involving the vendor. Configurability also involves the ability for individual users to configure their own solution based on how they like to work or view information.

For company and product assessments of the vendors covered in this research, see Figure 1, Figure 2, Figure 3 and Figure 4.

Source: Gartner (August 2012)

Source: Gartner (August 2012)

Source: Gartner (August 2012)

Source: Gartner (August 2012)

Vendor Analysis

Accenture CAS

Profile: Accenture CAS is a visionary in field sales automation that has constantly reinvented itself since it introduced the first Web-based TPM solution nearly a decade ago. CAS, one of the earliest entrants into TPO, was purchased by Accenture in January 2011.

Geographies covered: Global.

Tiers represented: All.

Strengths: Leveraging of Microsoft technology, superior user interface, and integration of TPM and TPO. CAS provides all field sales automation solutions, and has deep industry knowledge and the global reach of the Accenture organization.

Challenges: Difficulty in moving to Tier 3 with a cloud-based or other hosted solution. The TPM Lite product, launched in June 2012, is a hosted solution but provides no multitenant SaaS. CAS has been primarily focused on Tier 1 in North America and Tier 2 in Europe. Progress in moving to Tier 3 has been relatively slow. Tier 3 companies are nearly always impressed with the CAS Accenture offering, but say they can't afford it.

Adjacent expertise: Retail execution and monitoring, food service, shelf management including smart image capture through other Accenture offerings, distributor management, basic call center and field service capabilities, and data assessment service to assess the suitability of data for TPO.

Differentiators: Deep industry expertise, a lengthy track record in TPO, user experience, industry vision for moving from transactional to insightful to focused on promotional outcomes, global reach, and hosted and on-premises offerings that provide the ability to migrate between them because the architecture is the same.

Prognosis: Watch for Accenture CAS to be an early mover in the quest to progress from optimizing at the store chain to the store cluster, and eventually in generating an individualized offer. In addition, track its momentum in managed services, which will make its TPM and TPO offerings more affordable with a faster time to value.

Consider Accenture CAS when: You seek a TPM/TPO with proven global capabilities that provides a superior user experience.

Avoid Accenture CAS if: A low-cost solution is your top priority.

Adesso Solutions

Profile: Adesso Solutions is a longtime player in the TPM space that resulted from Adesso acquiring Gelco Trade Management in 2007. Adesso has unique capabilities in executing physical payments directly to the retailer.

Geographies covered: North America — primarily in food, beverage, household products and personal care.

Tiers represented: Some Tier 2 companies, with most in Tier 3. Customers are predominantly in food, beverage and personal care.

Strengths: Deep functionality promotion planning, execution and settlement, as well as integration to its line of payments capabilities. Adesso has an excellent understanding of the North American TPM market.

Challenges: The Gelco acquisition stretched resources when two companies of equal stature were combined. Subsequent changes in senior management pulled attention away from the customer base. The company became relatively stagnant in the area of new customer acquisition and even lost some customers. Efforts to keep the user interface and graphically oriented analytics on par with competitors have lagged but are under way. Enhancements that will be deployed in 3Q12 offer significant improvements in graphical visualization. There are no concrete plans for TPO or offline capabilities.

Adjacent expertise: Food service, payments capabilities.

Differentiators: Payments capabilities, industry understanding, experience in providing SaaS solutions, focus on security and control with SAS 70 Type I certification, and a focus on Sarbanes-Oxley compliance.

Prognosis: Look for a revitalized offering with an infusion of new management and a focus on new technology and the back end to provide more options for Tier 2 and Tier 3 organizations in North America.

Evaluate Adesso when: You seek a low-cost, SaaS-based solution with solid market understanding, but are just catching up to the market in analytical capabilities.

Avoid Adesso if: User experience is a high priority, you seek a global solution, or you want to move to TPO in the next 12 to 18 months.

AFS Technologies

Profile: AFS Technologies' legacy is in the food service business, but as it expanded into TPM in the retail business it concluded that acquiring the Synectics Group would greatly accelerate its TPM efforts as well as give it a TPO solution. Synectics was an early mover into TPO.

Geographies covered: North America.

Tiers represented: Some Tier 2 companies, with most customers in Tier 3. They are almost exclusively in the food and beverage industries.

Strengths: Synectics was an early entrant into TPO through partner relationships with River Logic and MindTree. It has also enjoyed high client retention due to excellent industry expertise and good TPM solutions with a focus on analytics. It has a highly loyal client base in TPM, and its highly usable TPO offering is a good fit for Tier 2 and Tier 3 organizations.

Challenges: Prior to being acquired by AFS, Synectics was largely a family-owned-and-operated company, and, as such, users enjoyed easy access to key personnel. Now that it has become part of a larger company that is backed by Goldman Sachs, AFS/Synectics will be forced to grow and compete for resources internally. Users may find it harder to know who to contact or how to be heard. There also may be fewer product releases over time. Also, while AFS has never really tried to expand globally, it may now be forced to do so in order to become attractive to Tier 1 companies. This may further tax resources and client focus.

Adjacent expertise: Food service, rebate management, ERP, and business intelligence (BI).

Differentiators: Easy-to-use TPO that is intuitive and powerful, yet simple. AFS has significant synergies in managing food service and "retail" businesses with a single back-end system.

Prognosis: Expect AFS to be a dominant player among companies that have food service and retail businesses. Watch for more traction and early adoption in TPO among Tier 2 and Tier 3 companies.

Evaluate AFS Technologies when: You are a Tier 2 or Tier 3 company, want integrated TPM/TPO, and have a food service offering.

Avoid AFS Technologies if: You seek a global solution in the immediate future.

DemandTec, an IBM Company

Profile: DemandTec is a predictive analytics pioneer that was acquired by IBM in 2011 while it was still working on integrating analytical offering from M-Factor (which it had acquired). In many instances, DemandTec was chosen to provide TPO on top of SAP TPM while SAP was still bringing TPO to market. It was also selected by customers because of its deep expertise in predictive modeling. After a relatively difficult financial past, it now benefits from access to capital and resources from IBM.

Geographies covered: North America, South America and Europe.

Tiers represented: Primarily Tier 1 companies with some Tier 2 organizations, mostly in food and beverage.

Strengths: TPO as a bolt-on to an existing TPM solution. The bulk of the TPO installed base is composed of retailers, so this enables DemandTec to garner insight from both sides of the retailer/manufacturer relationship. The company is experienced in providing analytical offerings through SaaS, which enables feature, data and model updates. DemandTec has deep, proven expertise in predictive modeling, as well as a strong integration/implementation partner network.

Challenges: Completing integration of the M-Factor acquisition while finding its way as a part of IBM. Becoming relevant as a TPO solution despite not having a complete TPM offering. Convincing users of adopting a swivel-chair approach of moving back and forth between a TPM offering and its TPO solution, or some integration at a higher level.

Adjacent expertise: Deal management trade network and marketing mix modeling. BI capabilities using IBM Cognos tools.

Differentiators: M-Factor's analytical capabilities to perform volume decomposition and market mix optimization are highly complementary, if not precursors, to doing meaningful TPO. The incorporation of marketing effects into TPO offerings include account-specific shopper marketing impact.

Prognosis: DemandTec will struggle initially to find its role in IBM while it continues to determine how to use its M-Factor assets. This will likely result in less frequent product releases and reduced customer focus, which is often the case when application vendors are assimilating new assets.

Evaluate DemandTec when: You place a high value on modeling capabilities and expertise.

Avoid DemandTec if: You are opposed to a bolt-on solution that will likely cause the user to toggle between two solutions for TPM and TPO.

G4 Analytics

Profile: G4 Analytics is a SaaS-based, integrated TPM/TPO vendor with origins as a BI consulting firm. It offers basic TPM solution but does not actively market it. As a result, no users have TPM solution running solo. All solutions have been delivered via a SaaS portal since 2009.

Geographies covered: The U.S., U.K. and Europe.

Tiers represented: All, with a heavy focus on food, beverage and personal care.

Strengths: Its expertise is in data integration, which is a requirement for accuracy in predictive modeling. Client retention is nearly 95% over a 10-year period, as compared with about 80% industrywide. G4 has retailer as well as manufacturer clients. Its offering provides good usability, with a gridlike orientation that appeals to users accustomed to Excel. Its configuration toolkit is one of the more extensive we have seen in SaaS solutions.

Challenges: Becoming relevant in Tier 1 and Tier 2 against global suite offerings of TPM and TPO while being relatively small and concentrated in the U.S. market. Pursuing Tier 2 and Tier 3 opportunities with only a basic TPM offering. Reports must be generated, because viewing data graphically is not seamless. Will require integration into both ERP and TPM solutions. Until this year, graphics had to be viewed as a generated report, as opposed to being able to change data and be able to visualize changes graphically on the same screen. This positive development has been late in coming. Thus, it may not impress prospects. Navigation is also a challenge for the nonpower users unless both TPM and TPO are utilized from G4 because of the need to toggle back and forth between two disparate TPM and TPO systems. Users often eschew planning in one solution and optimizing in another and are often not willing to integrate the two or to add a separate integration layer.

Adjacent expertise: Offers a separate demand signal repository.

Differentiators: Highly configurable SaaS solution without the need to customize. G4 has a key relationship with the Acosta sales agency in the U.S. market.

Prognosis: We expect G4 to remain a relatively small company with a narrow geographic focus that will appeal only to companies looking for multitenant SaaS. Another challenge is the inability to sell TPM as a stand-alone product, which is a much bigger market at present and will remain so for some time. As a result, G4 will have to be integrated with an existing TPM solution.

Evaluate G4 when: You want multitenant SaaS and can operate with a very basic TPM solution or a bolt-on situation.

Avoid G4 if: You are looking for a software solution that you can control yourself, or are seeking highly evolved reporting and data visualization.

ITC Infotech

Profile: ITC Infotech is the IT services subsidiary of ITC, an Indian conglomerate that specializes in consumer goods such as tobacco, food, apparel, stationery and personal care products. As such, ITC Infotech not only has created a TPM/TPO offering for its parent company, but offers a TPM/TPO solution for other companies. In the TPM/TPO area, this primarily consists of an "innovation pack" built onto Oracle's Siebel solution and a TPO model implementable onto various other platforms. ITC Infotech has a co-development partnership with Oracle, and provides regional and functional enhancements, functionality for wholesaler/retailer customers, optimization that does not rely on Oracle assets, and planning at additional levels of aggregation. As a result, we see ITC Infotech as a separate entity.

Geographies covered: All.

Tiers represented: All, with a primary focus on food, beverage and tobacco.

Strengths: Experience as a consumer goods company as well as software vendor. The ability to focus on industry capabilities and requirements on Oracle and other platforms.

Challenges: ITC Infotech is a relatively new entrant to the space. Also, being a consulting firm, outsourcer and TPM/TPO software company puts it in a rather unique category. As a result, prospects struggle to understand just exactly what sort of company it is. All Siebel IP ultimately resides with Oracle.

Adjacent expertise: Retail execution and monitoring with a focus on supporting channel partners such as distributors and wholesalers. The company also provides related services offerings.

Differentiators: Taking a good product (Siebel) and tailoring it based on market knowledge and insight as a CG company. Also, having a platform-independent TPO offering.

Prognosis: Although this is an interesting offering, it won't redefine the space. Still, it provides a different set of product and service options. Asia/Pacific users can expect ITC Infotech's growth in Asia to provide localized support and market expertise, but no adequate support from the larger integration partner community. The company's expertise in Asia won't sufficiently translate to the rest of the world.

Evaluate ITC Infotech when: You want to add capabilities to Oracle and value Asian experience with a complete solution and services offering, or if you wish to add TPO to your current TPM implementation.

Avoid ITC Infotech if: You have global requirements, need third-party integration support of your TPM/TPO solution from a vendor other then ITC Infotech, or are opposed to an underlying Oracle solution.

Klee Commerce

Profile: A TPM offering is complete, but Klee Commerce does not yet provide TPO. Graphics and visualization offered through QlikView are noteworthy. Klee also offers a mobile data cube. Klee has retail and manufacturing customers.

Geographies covered: Europe, with a stronghold in France.

Tiers represented: All. Customers include companies in food, beverage, personal care and household appliances.

Strengths: Analytics and shelf visualization/simulation. The ability support retailer-specific contracts down to the store level. Functionality for marketing plans and the ability to link them to trade plans.

Challenges: Global expansion will require more functionality around managing deductions beyond issuing credit memos. This is particularly required for the U.S. market.

Adjacent expertise: Storage of digital assets, retail execution and monitoring; and the ability to generate coupons. The offering can be used by partners through Web interface planogram/store shelf visualization.

Differentiators: Store shelf visualization, analytics and expertise in the European market.

Prognosis: Klee has much to offer users in Europe, but is not yet ready to support users beyond the continent. Users must understand that it will remain a niche vendor in functionality and geography.

Evaluate Klee when: You value analytics and visualization with a specific emphasis on the French market.

Avoid Klee if: You wish to move to TPO in 12 to 18 months or need global solution/support.

MEI (Currently Being Rebranded as TradeInsight)

Profile: MEI is a longstanding TPM player that has found a advantageous niche in SaaS by eschewing customization, embracing rapid deployments and offering full functionality with attractive terms. The company stands in stark contrast to the MEI of a decade ago, which focused on customized solutions for Tier 1 companies and attempted to be global. It offers TPO through an OEM relationship with TABS Group.

Geographies covered: North America.

Tiers represented: Tier 2 and Tier 3, primarily food and beverage with a unique emphasis on natural and organic products.

Strengths: A singular focus on consumer goods and industry expertise. MEI was an early mover in SaaS with the ability to deploy significant functionality in up to six releases per year. It has the ability to market itself and establish and image with relatively few marketing resources. MEI uses the TABS Group AccuBase engine to drive the TPO process to avoid spreading resources across both TPM and TPO. It has a wizard approach to setting up a trade deal. MEI offers online help screens with both text and video support capabilities, as well as a simplified user interface to speed adoption.

Challenges: The company needs to improve analytical capabilities to keep up with vendors that are focused on Tier 1 but moving downstream through new delivery mechanisms. We have seen some examples of enhanced capabilities coming online later this year; in the meantime, MEI will be challenged. Offline capabilities are accomplished through the Frontline Planner, an Excel add-in solution for the enterprise edition or an iTunes App for iPhone and iPad. Users may prefer other options.

Adjacent expertise: Retail execution and monitoring, and food service.

Differentiators: A loyal and happy-to-be-referenced user base. Functionality for understanding and modeling promotions through both direct and indirect customers.

Prognosis: Tier 2 and 3 companies will find TradeInsight to be a leader in SaaS-based delivery in North America, with a proven solution that is well supported by Tier 2 and Tier 3 companies. The adoption of TPO will take time in these tiers, but MEI will be well-positioned for its uptake.

Evaluate MEI when: You want a SaaS-based solution with low implementation costs and superior customer support, and you don't require customization.

Avoid MEI if: You need a global solution or want to customize beyond what you see in the solution. Also look elsewhere if you need offline capabilities beyond the Excel add-in or support for Apple devices.

MindTree

Profile: MindTree is new entrant into TPM/TPO with an offering that brings a strong services offering with deep statistical capabilities such as cannibalization/halo effects and volume decomposition.

Geographies covered: Global aspirations but no real geographic strengths as of yet.

Tiers represented: It is presently more focused on Tier 1 in emerging markets and Tiers 2 and 3 globally.

Strengths: The ability to combine analytical services and data management with an integrated TPM/TPO offering.

Challenges: Being an Indian software company competing against more local solutions with longer histories in their geographic spaces.

Adjacent expertise: Data management services, master data management, and the ability and willingness to customize.

Differentiators: The ability to help users understand and work with predictive models. SaaS-based offering to more effectively compete on price, services resources, expertise in ERP systems and integration.

Prognosis: It will take three to five years to achieve the kind of momentum that other TPM/TPO vendors have, but MindTree has the potential to create a relatively low-cost but powerful offering for Tier 2 and Tier 3 companies. We do not see it making many inroads into the global Tier 1 space due to its late entry into the marketplace and the entrenched competition.

Evaluate MindTree when: You seek and end-to-end TPM/TPO offering with consultative and implementation services.

Avoid MindTree if: You want to follow a well-worn path in your particular subsector of CG.

Oracle

Profile: Oracle is a pioneer in TPM and TPO solutions that can be used in concert with its own or any other ERP solution. It has considerable industry and partner resources, global reach and one of the largest installed bases in TPO.

Geographies covered: All.

Tiers represented: All, with use among diverse industry subsectors.

Strengths: Oracle boasts an end to-end offering, the strength of its partner network, industry expertise and presence, maturity, and completeness of both TPM and TPO offerings. Oracle has a loyal user base, as well as the ability to improve the user experience year after year and stay highly relevant.

Challenges: No SaaS offering. Highly customized offerings in the past and difficulty in getting users to upgrade.

Adjacent expertise: ERP, demand signal repository, food service, supply chain, retail execution and monitoring.

Differentiators: Deep experience in linking demand creation to demand fulfillment. Industry understanding and partner network. The ability to mobilize resources quite quickly for a company its size in response to market requirements. A demonstrated ability to work with clients of all sizes and all back-office persuasions.

Prognosis: Oracle can help CG companies of all sizes because of its experience/expertise and the diversity of its installed base. It will continue to be formidable and resilient to assaults from best-of-breed and other enterprise software vendors.

Evaluate Oracle when: You need global reach and support, require deep expertise in subsectors beyond the food, beverage and personal care industries, and value integrated TPM/TPO.

Avoid Oracle if: You value SaaS and/or a very low-cost solution.

Promax (Wipro Promax Analytics Solutions)

Profile: Promax is an integrated TPM/TPO offering originally from Australia, which in recent years has expanded to Western Europe and North America. An on-premises solution based on Citrix that is feeling its way into fully hosted SaaS solution, Promax boasts a blue-chip client base in Australia and in some cases is able to leverage the relationship into new geographies. All unique requirements must be accommodated through configuration, as they don't customize. The company does consider customer requirements for possible inclusion in its road map but it does not customize for unique customer requirements. India-based Wipro acquired Promax in April 2012.

Geographies covered: Australia, Japan, Europe and North America.

Tiers represented: All. Primarily food, beverage and personal care.

Strengths: The ability to utilize predictive models developed by customers, fast time to value based on not customizing, and a loyal customer base.

Challenges: Just as Promax was developing a following with some integrators, it was obtained by Wipro. This will alienate its partners. Big CG companies like to customize — it is their nature. While the user interface that is spreadsheetlike has appeal to certain user types, it is limited in how it can present data (such as through hovers and other advanced features), and makes capabilities such as offline analytics a challenge.

Adjacent expertise: Predictive modeling in general.

Differentiators: Statistical models are intertwined in the solution, as opposed to a separate set of screens or a tab. Models take various forms and can be substituted to find the one that works best.

Prognosis: The rapid expansion into uncharted waters outside of Australia and the sale to Wipro will sap Promax's focus and momentum, thus challenging user organizations. Users will also have to plan for the contingency that Promax will fade away in the marketplace because Wipro — unlike Accenture or IBM — doesn't have the access to the C-suite for strategy consulting. As a result it won't be able to recommend Promax in many cases. Moreover Promax's previous partners will no longer bring Promax into deals because they believe the implementations will fall to Wipro. Ultimately, we believe that Promax will stay capped at an annual revenue of less of than $25 million, talent will leave (like in most acquisition scenarios) and users will have to look elsewhere.

Evaluate Promax when: You seek a relatively easy-to-deploy TPM/TPO solution to get comfortable with both aspects, and accept that it may be temporary.

Avoid Promax if: You wish to customize, value an engaging user interface or are looking for a long-term solution.

SAP

Profile: SAP is an enterprise software vendor that produced several generations of TPM offerings before moving into TPO in May 2011. It has utilized its Khimetrics acquisition from 2006 and its 2007 purchase of Business Objects to provide predictive and BI offerings. SAP has made considerable progress in ergonomics and user experience in the past year. If there were a designation for "most improved" product offering over the past year, SAP would win the prize.

Geographies covered: All.

Tiers represented: All. Very diverse in industry subsectors.

Strengths: SAP has name recognition with IT organizations and a vast installed base. Enhancement Packs deliver value between releases. Predictive capabilities are part of the process, not a separate tab or a series of screens. SAP uses a wizard-driven approach to TPO. It offers a preconfigured solution with accompanying services and support to accelerate deployment. Moreover, SAP is ahead of many competitors in understanding and penetrating China.

Challenges: SAP was late in bringing TPO to market, and user uptake has been very slow. We estimate that more than half of new TPM/TPO candidates still decide in favor of competitors. Users tell us they don't find that the TPM/TPO solution integrates into the SAP back-end system as easily as they believed it would be when they purchased or decided to upgrade to it. They also say it requires more than customization than expected to fulfill their basic needs. While the UI has improved, it is often not sufficient enough to compete with best of breed, which users consistently prefer. In our reviews of the product, the SAP BusinessObjects components are very visually appealing but we didn't see them often. While the references we have spoken with have been more positive, SAP still struggles to provide us with a significant quantity of references.

Adjacent expertise: ERP and traditional CRM capabilities, such as contact center and supply chain.

Differentiators: SAP takes an enterprise approach to everything it does. It has a strong partner network and is focused on key enablers like in-memory computing.

Prognosis: We don't believe SAP will completely close the gap on best of breed. We don't see it dominating the market because it doesn't seem to be able to mobilize resources fast enough to keep up with competitors. For example, it owned Khimetrics for five years, yet was the last of its peer group of global players to have a TPO offering. Also, it may be the last vendor to offer TPM/TPO in a managed services offering, and a multi-tenant SaaS offering may be even more difficult to achieve despite a market that has demonstrated an appetite for such a product. TPO will now take three to five years to show momentum — like other vendors that have entered that space — but meanwhile, competitors will make share gains that will be difficult to win back because of the embedded nature of TPO and related processes. Nevertheless, SAP will remain relevant because of its position in the back office and the influence it exerts on IT strategy among companies that use it.

Evaluate SAP when: Having an end-to-end solution is paramount.

Avoid SAP if: You want a superior user experience, seek to move to TPO immediately with a solution that has a significant installed base, or eschew customization.

TABS Group

Profile: TABS Group is a TPO solution provider with a focus on delivering value through a combination of solution and rigorous consultancy. TABS Group can be used stand-alone for TPO and also through an OEM arrangement with MEI (TradeInsight).

Geographies covered: North America and Europe.

Tiers represented: Tier 1 and Tier 2.

Strengths: A loyal client base and the ability to wrap services around the TPO analytical product to the point of being able to outsource some analytical functions.

Challenges: Positioning a consultative solution in a market focused more on software, where firms guiding the technology selection process are not likely to recommend TABS consultants, who likely know the ins and outs of predictive modeling in the market better than they do.

Adjacent expertise: Volume planning, integration and harmonization of global syndicated data.

Differentiators: A focus on results and methodologies as opposed to technologies. Data harmonization and integration are required to fuel accurate predictive capabilities.

Prognosis: TABS will remain a niche player focused on TPO and related services, primarily in North America, due to its need to learn to act as a software company and deliver as a stand-alone or bolt-on to a TPM.

Evaluate TABS Group when: You favor a consultative offering with deep expertise in forecasting and predictive modeling. Also look at TABS if you use TradeInsight or are considering it.

Avoid TABS Group if: You need a global presence or are opposed to a bolt-on solution.

Xtel

Profile: Xtel is an innovative TPM/TPO vendor with a significant presence in Europe as it gains traction in North America. It offers a highly configurable solution based on Microsoft Silverlight.

Geographies covered: Europe.

Tiers represented: All.

Strengths: Industry knowledge, user experience, solid references and a complete solution for field sales automation.

Challenges: Offering users a SaaS solution in the short term, as there are no plans for it in 2012. Xtel offers a hosted solution, but a SaaS offering will take another year to produce.

Adjacent expertise: Sales quota and incentive management, retail execution and monitoring, sales volume planning, and pricing management (rule-based pricing).

Differentiators: User experience. A product specific enough to capture the nuances of the southern European market but general capabilities for all of Europe. Retail execution and monitoring and a complete sales performance management platform.

Prognosis: Considering its ability to go Pan-European an a relatively compressed time frame, we expect Xtel to satisfy user needs in Latin America or North America in the next 12 to 18 months and become another global best-of-breed vendor with strong retail execution/monitoring and trade promotion capabilities similar to Accenture CAS and Oracle.

Evaluate Xtel when: You favor a strong user experience, good analytics and European expertise, as well as when you need integrated sales quota and incentive management.

Avoid Xtel if: You have an immediate need for a global or SaaS-based solution.