Vendor Panorama for Trade Promotion Management in Consumer Goods, 2014

28 March 2014 ID:G00249438
Analyst(s): Dale Hagemeyer

VIEW SUMMARY

Technologies related to managing trade promotions have never been more relevant, as the average revenue expended by manufacturers for promotions now exceeds 20% of revenue. Companies are leaving spreadsheets for automated technologies, while others are adding promotion optimization capabilities.

Overview

Key Findings

  • TPM solutions are becoming largely commoditized, with solutions largely covering functional requirements and providing little differentiation. As a result, the focus is shifting to price and delivery methods like SaaS.
  • We are seeing trade spending approaching 40% in some markets, like China. There is no indication that trade spend increases have abated since we published our previous Panorama on TPM/TPO in August 2012.
  • Global deployments are typically not practical due to solution cost considerations, gaps in vendor geographic presence and difficulty in adapting solutions to meet local requirements.
  • Usability has improved across the marketplace, but we still see existing solutions that have Excel front ends built onto them because salespeople have rejected the UI.

Recommendations

  • Take a global view of your trade promotion needs, but recognize that you will not be able to utilize a single solution in all geographies due to differences in solution cost, local market functionality and availability of support.
  • Evaluate a combination of SaaS and on-premises solutions to determine whether they can meet their business processes with configuration capabilities in SaaS.
  • 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.
  • Consider automating these processes as soon as possible if you are using spreadsheets to manage promotional planning and trade funds. With trade spending continuing to increase and the need for strong analytics as a differentiator, it doesn't make sense to wait.

Table of Contents

Analysis

Market Overview

This research is an update to one that was published 31 August 2012. It is also a companion to the "Vendor Panorama for Retail Execution and Monitoring in Consumer Goods," published 6 September 2013. Here, we profile the TPM and TPO marketplace, and the leading vendors in it, to help consumer goods companies use technology to better manage trade promotions.

Market requirements remain largely unchanged since the last Panorama was published. However, we have increased coverage, as some vendors have increased their visibility in the marketplace. As a result, a total of 20 vendors* of either trade promotion management (TPM), trade promotion optimization (TPO) or both are featured in the research. This variety partially stems from the varying approaches to managing promotions, despite market requirements remaining largely unchanged. Specifically, these are: an end-to-end approach from a single vendor for TPM and TPO, putting best-of-breed TPO on top of an existing TPM solution or running the two separately in a disconnected fashion.

We continue to see that TPO is a major consideration in TPM selection and estimate that 75% of TPM purchases include some consideration for TPO. Consumer goods companies have realized that they need to improve their ability to look at promotional outcomes to drive more collaboration with retailers, do better volume forecasting and attempt to reduce overall trade promotion spending rates.

Other developments in this space include:

  • Increasing momentum in developing "mixed" markets, like Mexico, Chile and Argentina, where the modern trade can account for half of revenue to some consumer goods companies.
  • The continued emergence of SaaS-based solutions, particularly in Tier 2 and Tier 3 companies. This research features several such offerings that are on our radar screen.
  • Focus on enhancing user experience as a differentiator where competitors have complete functionality, but the UI is lacking. The same can be said for analytics and data visualization as part of the user experience.
  • 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.
  • No efforts behind server-based homegrown solutions that we have seen. Homegrown solutions continue to be PC-based Excel spreadsheet applications. But what we don't see are new ones being created, because of some hesitancy around launching into TPM. Instead, it is a continued reliance on existing spreadsheets because of some internal reason, such as merger and acquisition (M&A) activity, lack of funding or inability to get consensus on which vendor to use.

*Two other vendors, JDA and Sequoya, were initially engaged in the process, but later removed from consideration because they did not want to provide information and/or product demonstrations.

Evaluation Criteria

We recommend using these ratings to narrow down your options. Geographic is the first place to start. If you operate in a specific set of geographies then narrow your search based on those and then determine whether you seek TPM, TPO or both. This will further narrow your search. Additional criteria could be how much of a differentiated product you seek. If this is high, then weight companies with better company vision. Conversely, if you wish to play it safe, then place more emphasis on those with higher company viability. Continue to rank and weight the criteria, based on what is most important to you. This will help to make the selection process more objective as well as help you deal with the complexity of having to look at these 20 options.

Company Assessment

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 the specific sales trade promotion marketplace where it has chosen to compete. We also emphasize financial transparency, regardless of vendor size.

Geographic Strategy

This is the vendor's strategy to direct resources, skills and offerings to meet the specific needs of the geographies that it is targeting directly or through partners, channels and subsidiaries, as appropriate for that geography and market. This also covers a vendor's ability to support these companies on targeted continents and in targeted languages, as well as the vendor having the quantity and quality of clients available to provide references from targeted tiers of consumer goods companies. Tier 1 companies have revenue greater than $1 billion. Tier 2 companies have revenue of between $250 million and $1 billion. The revenue of Tier 3 companies is 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 relatively 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

This is a vendor's demonstrated ability to deliver trade promotion solutions for consumer goods companies through its own implementation or with the help of external service partners, as may be required by its clients.

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. This also means having an in-depth understanding of the consumer goods industry and the needs of companies in this market segment, coupled with the ability to act in time to remain relevant, translate this market understanding into comprehensive functionality and meet customer needs within its geographic scope, worldwide.

Vertical/Industry Strategy

This is the vendor's approach to product development and delivery, recognizing the unique requirements of the geographies and types of consumer goods 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 fully covering the functional footprint within the geography where the vendor operates. This is not to say that a vendor needs to cover the globe, but must accommodate variations within its targeted geographies.

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

Partner Leverage

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

Company Vision

This is the ability to attract and retain personnel that will keep the company relevant and growing. It is also 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 Assessment

Product Aptness and Flexibility

This is the vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements. This also includes Web and mobile technology that is scalable and can support internal sales personnel, as well as partner sales agents. The data model can support appropriate hierarchies of customers and products (e.g., product family, brand and SKUs). The product also supports multiple platforms, such as laptops, tablet devices and current forms of handheld devices. The vendor's technology can be expanded to integrate with other company legacy solutions, best-of-breed offerings or syndicated data sources. These criteria also include important enablers, such as order and data management, content management, contract management, reporting and analysis, and full online/offline capabilities as required.

Delivery Flexibility

This is the vendor's ability to provide its solutions in multiple fashions: on-premises, third-party-hosted and SaaS.

TPM Completeness

The vendor offering TPM 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

The vendor offering TPO must have 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 UI, navigation and ergonomics for moving throughout the promotional cycle.

Analytical Capabilities

Analytical capabilities involve:

  • Graphics — 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 ability to specify conditions that will result in a notification through the TPx system, email or text message.
  • Reporting — Predefined reports or embedded report writers.
  • Query — Embedded technologies such as online analytical processing (OLAP) to enable data analysis; ability to export to Microsoft 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

This 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. Special consideration is also given where individual users can configure their own solution, based on how they like to work or view information.

Comparative Assessments

For company and product assessments of the vendors covered in this research, see Figures 1 through 6.

Figure 1. Company Assessment
Figure 1.Company Assessment

Source: Gartner (March 2014)

Figure 2. Product Assessment
Figure 2.Product Assessment

Source: Gartner (March 2014)

Vendor Analysis

Accenture CAS

Profile: Accenture CAS is a longtime player in the CG industry that came about by Accenture acquiring CAS in 2011.

Geographies covered: North America 58%, Latin America 0%, Europe 23%, Asia/Pacific 19%.

Total users: 8,500.

Tiers represented: All.

Strengths: Data visualization UI is among the very best. One of the few solutions with integrated TPM and TPO from the ground up. Strength and variety of the predictive models that can be selected automatically, based on ability to quantify the strength of the predicted outcome. Also, it has the ability to provide product and services across the globe.

Challenges: Difficulty in scaling its offerings down to smaller organizations and in achieving rapid rollouts. Also, the inability to move to a SaaS solution. Far too many companies are impressed with the offerings, but simply cannot afford them. As a result, Accenture CAS wins less than what we believe to be its fair share of deals. It is developing TPM accelerator as a lower-cost option for Tier 2 and Tier 3 companies, but we believe it has been a bit slow in responding to this market segment.

Adjacent expertise: Retail execution and monitoring, food service, shelf management (including intelligent image interpretation 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 and a paid proof-of-concept offering to ensure end-user confidence in TPO outputs.

Differentiators: As a company, Accenture has very strong industry expertise and strong implementation capabilities around the globe. It can bring a bundled offering of software and services to an Accenture CAS implementation. On the product side, it has unique automated data quality check capability, the ability to optimize promotions even when selling through a channel partner and very nice promotional calendar that features drag and drop.

Prognosis: Accenture CAS has to quickly move down market with its new TMP accelerator offering or risk losing relevance with Tier 2 and Tier 3 companies. The next 12 to 18 months will be critical in seizing these opportunities. It can no longer afford to be positioned or perceived as a premium product for larger companies, with large budgets and the patience for lengthy deployments.

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, with a cloud-based, multitenant SaaS solution. It is arguably the most improved vendor in the space, both in solution and related support, since the previous Panorama was published.

Geographies covered: North America 100% — primarily in food, beverage, household products and personal care.

Total users: 5,114

Tiers represented: All tiers.

Strengths: Offering a blend of solution and support services as well as a peer company network for sharing best practices in improving promotions, which it calls TPE, or trade promotion effectiveness. Excellent "hovers" to expose underlying data as well as hyperlinks to all aspects of the application. Deep functionality in 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: Getting a forum for showing improved solution and support capabilities. Catching up in the TPO space.

Adjacent expertise: Food service, payments capabilities.

Differentiators: Unique yellow shading to indicate mandatory entry fields. Offline planner with Excel front end. Experience in providing SaaS solutions. Ability to outsource TPM-related administrative and analytical services to a greater or lesser degree over time based on needs. Very user-friendly system administration capabilities.

Prognosis: Look for growth and recuperation of market positioning through a combination of product and service offerings.

Evaluate Adesso when: You seek a low-cost, SaaS-based solution that feels more like a community than a vendor offering.

Avoid Adesso if: You seek a global solution, TPO in the near future or are prone to customization.

AFS Technologies

Profile: A rearchitected solution based on the former MEI (Trade Advantage) and Synectics Group offerings.

Geographies covered: North America 100%.

Total users: 11,700

Tiers represented: All tiers. Diverse customer base across consumable products.

Strengths: Industry expertise, strong analytical capabilities and the ability to cover both TPM and food service needs with a single back end. Upgraded architecture from those previously used by Synectics and MEI, prior to respective acquisitions. Only vendor we know of that offers ERP, TPM, TPO, food service deal management and retail execution, focused on Tier 2 and Tier 3 companies. Has the potential to be an early TPO mover in Tier 2 and Tier 3 now that those assets acquired with Synectics have been made available as part of the new offering.

Challenges: AFS has made serial acquisitions in both TPx and retail execution/monitoring in the last couple of years. In so doing, it has had to integrate the new solutions and lost some key personnel in the process. It has also experienced some sales execution issues, but appears to be stabilizing.

About 65% of legacy clients need to be transitioned to the new solution. Having a TPO offering is a partial inducement to upgrade, but many Tier 2 and Tier 3 companies are still waiting for TPO to be more widespread in the marketplace before they jump in.

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

Differentiators: Highly ergonomic solution with best-in-class UI. AFS has significant synergies in managing food service and "retail" businesses with a single back-end system. No professional service fees; all deployment costs are rolled into the monthly fee.

Prognosis: Look for AFS to expand its TPM business to mirror its more global retail execution and monitoring business. Also, look for it to play a leadership role in TPO in its target tiers, as it is well capitalized and has strong product offerings.

Evaluate AFS Technologies when: You are a Tier 2 or Tier 3 company, possibly have a food service business, prefer SaaS for TPM and have plans for TPO. AFS is also becoming more relevant to Tier 1 companies, given its broad offerings, enhanced UI and TPO capabilities.

Avoid AFS Technologies if: You seek a global solution in the immediate future. AFS is willing to customize a solution and run it as a one-off, but we don't recommend moving away from the mainstream and related upgrade cycle because of the many upgrades that will be missed in what is an aggressive development cycle compared to other vendors.

Comarch

Profile: Relatively new TPM offering from a relatively large (approximately $275 million) diversified technology and services provider, headquartered in Poland.

Geographies covered: Europe (including Russia) 100%.

Total users: 100

Tiers represented: Tier 3.

Strengths: Has both a head start and scale in Central and Eastern Europe, with solution footprint ranging from ERP to retail execution and monitoring. Understanding of distributor channel and being able to execute promotions through channel partners.

Challenges: These are primarily around visibility as many multinational consumer goods companies are not fully aware of the strong IT capabilities coming out of Poland.

Adjacent expertise: POS data management and cleansing, shelf management/visualization, retail execution and monitoring, compensation and incentive management, with gamification components.

Differentiators: Deep knowledge of the Central and Eastern European market and growing presence across the rest of Europe, plus the ability and scale to do a Pan-European deployment on its own. Highly configurable solution, very clever report writer, "Fast Grid," that is drag and drop either from scratch or an adaptation to an existing report, and the ability to look at two promotional calendars side by side.

Prognosis: Comarch faces a fairly wide-open field in Central and Eastern Europe, and can leverage existing relationships both in TPM and retail execution to be a player in Europe and the leader in Eastern Europe in the next one to three years.

Evaluate Comarch when: You need a full service TPM solution and services for Europe and a partner with a broader IT footprint.

Avoid Comarch if: You are looking to do TPO in a one- to two-year time frame or require a global standard solution. We did not find Comarch to be ready for the complexities of working with the modern trade in markets like the U.K., Australia and North America where the promotions are complex as well as the settlement process (like deductions management).

CPGToolBox

Profile: Relatively new entrant and first TPM solution we know of that is based on the Force.com platform from salesforce.com.

Geographies covered: North America 100%.

Total users: 300

Tiers represented: Tier 2 and Tier 3. Focused on food, beverage and personal care.

Strengths: Technology that has proven scalability. Analytics are above average, and partnership with S3 Mobility further improves the user experience. Reliance on Force.com platform for non-consumer-goods requirements allows for four upgrades per year.

Challenges: A complete system, but focus is on software development, not implementation, which will put it at a disadvantage against competitors that can deploy. Over time, salesforce.com tends to see if its partners succeed in these types of specific functionalities and then actively compete against them. CPGToolBox has no contractual arrangement to keep them from doing so.

Adjacent expertise: Food service.

Differentiators: Very nice landing page with dashboards that are configurable at the individual user level. Offers TPO through relationship with T-Pro Systems, which makes it unique in offering TPO to Tier 3 companies (but can also bring in lift coefficients from third-party sources). Chatter enabled for capturing best practices and sharing information about the business, like an open deduction. This solution is more focused on an extended team than a lone-wolf salesperson.

Prognosis: An interesting and rapidly evolving solution at a very attractive price point — but we believe that rapid growth has potential to hasten cannibalization by salesforce.com.

Evaluate CPGToolBox when: Your focus is on software with a rapid deployment of a SaaS solution, but don't require support services from the vendor. Also consider it if your focus is North America.

Avoid CPGToolBox if: You have need or predisposition to customize. You want to be able to work offline.

Data Ventures

Profile: Data Ventures is a business analytics company offering TPO through analytical products and services through a SaaS platform. It does so for both manufacturers and retailers.

Geographies covered: North America 100%, but performs analysis of foreign markets for its U.S.-based clients.

Total users: 50 companies and 400 users.

Tiers represented: Primarily Tier 1 companies, with strong emphasis in soft drinks.

Strengths: Very strong in combining pre-event and postevent analytics.

Challenges: Articulating the difference between deep analytical capabilities, based on user requirements and basic reporting/data visualization; also, between a combined software offering with support to do the analytics versus software with some training. In our experience, very few companies can provide this depth of insight — but this doesn't come out in the brochure.

Adjacent expertise: POS/scan and loyalty card data management as well as analytics, evaluation of new product introductions and shopper behavior analytics. Also category management functions such as assortment and space allocation optimization. Supply chain forecasting.

Differentiators: Deep analytical capabilities with the ability to work alongside clients, as well as outsource analytical functions. Specific expertise in managing and analyzing loyalty card data to determine which programs worked, which didn't and why. In particular, a unique approach to ranking and filtering promotions, based on attributes to see the drivers of relative success and failure. Also, being wholly owned by a Coke bottler (Coca-Cola Bottling Co. Consolidated), which provides a willing test market for new capabilities, with sophisticated and highly embedded clients.

Prognosis: The company will remain a niche analytics player providing insight to even the most analytically strong consumer goods companies. This type of focus doesn't lend itself to mass-produced software.

Evaluate Data Ventures when: You seek analytical depth with a focus on services that include tools as opposed to software tools alone — in particular, when you seek more of a power user tool for deeper analysis as opposed to something lighter in scope for the masses. Also, when you are looking to add a stronger shopper-centric dimension to your promotional planning/analysis.

Avoid Data Ventures if: You seek TPM or a transactional solution, as the focus here is on insights through advanced analytics. Checkbook and settlement will have to be handled through integration with some other tool. Also, if you seek a slick and easy tool. The UI is more focused on power than on elegance. Viewing data graphically is secondary to understanding it. The graphics are there, but are not the center of focus.

Exceedra

Profile: A new entrant to our Panorama, based in the United Kingdom, but establishing a presence in the U.S. market. Its focus is on adoption through user experience across both TPM and TPO, with a multitenant SaaS offering.

Geographies covered: Europe 100%.

Total users: 760

Tiers represented: Initially focused on Tier 2 and Tier 3, but now getting traction with Tier 1 across food, beverage, personal care and consumer durables.

Strengths: Broader footprint than just TPx that includes category and supply chain management (SCM) and sales and operations planning (S&OP). Strong focus on the financial aspects of promotions. Licensing model is based on a range of users, instead of specified by name as a percentage of COGS. We believe this approach to be the most enlightened.

Challenges: The approach to TPO is more of a template that is applied at a macrolevel. It has no ability to optimize a promotional outcome subject to specific constraints. We believe this will have to be improved in order to have broader appeal. Otherwise, the only other challenge we see is associated with having come on the scene relatively late and having to build a customer base by converting companies that, in many cases, have previously chosen a competitor. This also means building a base of implementation partners to provide coverage of Europe, as well as globally.

Adjacent expertise: POS data management, demand signal repository (DSR) (including cleansing), supply chain management, S&OP and new product development management.

Differentiators: A unique "risks and opportunities" capability that allows management of the more granular business processes to bridge the status quo to the objective. A highly configurable solution even at the individual user level. Very ergonomic and elegant UI, including elements found in mature TPx solutions such as Gantt charts, scattergrams for manufacturer/retailer margins, full use of hovers, graphical promotional calendar and date/time stamps for all changes of key fields.

Prognosis: We see Exceedra becoming a global player in the next one to two years, based on industry expertise, a strong and complete product offering and a growing installed base of multinational companies.

Evaluate Exceedra when: You want to combine a superior UI with SaaS for both TPM and TPO. In particular, if you are seeking a solution for Europe, prefer a more financially oriented view of promotions (akin to joint business planning) and want a partner that can also do data scrubbing to ensure clean inputs into TPO.

Avoid Exceedra: If you believe you will need customized solutions, require a global deployment in the next 12 to 18 months or have an immediate need for constraint-based optimization.

Flintfox

Profile: A new TPM entrant to our Panorama that is U.S.-based, but has a relatively strong global reach for its size. It is highly oriented toward Microsoft, including the underlying Microsoft Dynamics architecture, connectivity with Dynamics ERP and reliance on Microsoft CRM to utilize its solution, which it calls Trade Relationship Management.

Geographies covered: North America 60%, Europe 25%, Latin America 15%.

Total users: 5,000

Tiers represented: Tier 2 and Tier 3.

Strengths: It claims 100% user retention over the last five years. Lots of partner leverage for selling and servicing its product. Expertise in consumables, as well as durables.

Challenges: The solution is relatively immature in that it has no capabilities in rendering baseline/promoted information, requires a separate click and step to see results of arithmetic "what-if" calculations and is still in the process of creating the canned reports that accompany the solution. It also has no plans for TPO. We found the UI to be below average, even after being revamped in early 2014.

Adjacent expertise: POS data cleansing, shelf management.

Differentiators: It claims status as one of only 25 Global Microsoft independent software vendors (ISVs) and the only one in the TPx space. It's the only solution we know of that has TPx embedded in Microsoft CRM.

Prognosis: We see Flintfox remaining linked to Miscrosoft ERP and the related ecosystem, but not taking a leadership position in any tier or industry subsegment, as long as it is largely sold and serviced by third parties.

Evaluate Flintfox when: You have Microsoft Dynamics ERP and are bought into the merits of having TPx inside of the CRM system. Also, if you want your vendor to provide ongoing services and ongoing best practices.

Avoid Flintfox if: You have imminent plans for TPO, seek a vendor that can partner with you for best practices and ongoing support, or are seeking even average usability and analytical. Also, if you are part of the vast majority of consumer goods companies that aren't using/bought into Microsoft Dynamics for CRM, ERP or anything else.

IBM DemandTec

Profile: DemandTec is a predictive analytics pioneer that was acquired by IBM in 2011. It offers TPO as well as partial TPM functionality.

Geographies covered: North America 61%, Latin America 22%, Europe 11%, Asia/Pacific 6%.

Total users: 700

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

Strengths: Expertise in predictive modeling, both for manufacturers and retailers. Delivering TPO as a SaaS-based solution. Relatively strong in postevent analysis. Additional predictive modeling expertise through SPSS, which is also an IBM company. The system can work without POS data when it is not available.

Challenges: Becoming relevant as a TPO solution, despite not having a complete TPM offering. The UI is intentionally similar to Microsoft Excel and gridlike in nature, which many users do not prefer. Also, overcoming the integration obstacle to avoid forcing users to toggle between two solutions and the perception that it is a Tier 1 solution. Some additional features are required to move this from a power-user tool to the rank and file, such as approval workflows.

Adjacent expertise: Deal management trade network and marketing mix modeling. BI capabilities, using IBM Cognos tools. DSR and related services wrapped around the Relational Solutions product.

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 includes account-specific shopper marketing impact. Ability to roll up plans across markets, categories and retailers to derive a view appropriate to a role such as brand manager, supply chain manager or sales executive. We were impressed with how few screens are required to do a simulation.

Prognosis: DemandTec has struggled to find its stride in the marketplace. As a result, it has garnered less than its share of deals. Its decision in February 2014 to stop seeking new TPx customers casts into doubt how serious it is about the space, until it can combine a full TPM solution with its TPO and articulate its differentiation.

Evaluate DemandTec when: You are an existing DemandTec customer and place a high value on modeling capabilities and expertise. Existing customers should also watch the upgrade cycle closely to ensure that it is keeping pace with the rest of the market and be prepared to evaluate alternatives if the product or service fall behind expectations.

Avoid DemandTec if: You don't have an existing footprint with DemandTec or the former M-Factor. Also, if you seek a seamlessly integrated TPM/TPO offering and a superior UI.

ITC Infotech

Profile: ITC Infotech is the IT services subsidiary of ITC Ltd., 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: Europe 80%, Latin America 10%, Asia/Pacific 10%.

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

Total users: 4,000 (Gartner estimate)

Strengths: Experience as a consumer goods company, as well as software vendor. Expertise and focus on developing countries. The ability to deliver against industry requirements on Oracle and other platforms as needed in the marketplace as a true one-stop shop for solution and services.

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. Also, most global consumer goods companies make TPx solution decisions in North America or Europe, but ITC Infotech has not yet been able to insert itself into the venues where these decisions are being made.

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

Differentiators: Improving upon the Siebel and Oracle Business Intelligence Enterprise Edition (OBIEE), with its own open UI-based enhancements, able to host the entire solution on a price on a per-user, per-month basis. Resources required to build and support specific instance customizations. Some of the most compelling dashboards and analytical views of things like cannibalization, promotional lift decomposition and ROI that we've seen in a TPx solution.

Prognosis: A very interesting set of solutions for both developing and developed countries, based on all the best of Siebel plus robust services and its own experiences supporting ITC. Limited as a consumer goods company. These solutions have more global potential than the majority we have evaluated.

Evaluate ITC Infotech when: You want a TPM/TPO partner to help with a solution for developing countries that has expertise, intellectual property (IP) and is willing to tailor it to your needs. Also, if you want a TPO solution that can be put on top of an existing TPM, and a services provider to make it happen.

Avoid ITC Infotech if: You are opposed to an underlying Oracle solution.

Klee Commerce

Profile: A Europe-centric TPM vendor, with a focus on usability and visualization. Klee has both retail and manufacturer customers.

Geographies covered: North America 4%, Latin America 2%, Europe 93%, Asia/Pacific 1%.

Total users: 11,000

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

Strengths: Deep expertise in the French market and ability to penetrate French affiliates of companies that have globally standardized on other solutions. Very high user retention. Strong analytics and shelf visualization/simulation.

Challenges: Deeper global penetration will require investment in TPO as well as more functionality around managing deductions beyond issuing credit memos. This is particularly required for the U.S. market. Otherwise, the challenge is around getting exposure; when user organizations see the solution, they are very drawn to it.

Adjacent expertise: Storage of digital assets, retail execution and monitoring, and the ability to generate coupons. Media asset publishing and distribution. Shelf management/visualization.

Differentiators: Strong synergies between TPM and retail execution because of expertise in store shelf visualization and analytics. The most flexible solution at the individual user level of those we have evaluated. This includes background colors, characters, type fonts, icons, home page layouts and so forth, and can be updated without logging off. Excellent ability to forecast at the product or family level on a single screen. Can enter data by cutting and pasting directly from an Excel file. Full offline capabilities, including analytics based on either QlikView or GrapeCity PowerTools components. The ability to support retailer-specific agreements down to the store level, with specific rules for each. Functionality for marketing plans and the ability to link them to trade plans.

Prognosis: Klee has much to offer users in Europe, but penetration elsewhere has been slow. This creates an opportunity for a global consumer goods company to use Klee globally to provide a rich user experience and deep analytics if it has the patience and resources to work through a joint expansion plan.

Evaluate Klee when: You value strong usability, analytics and visualization — in particular, when you want expertise and experience in Europe.

Avoid Klee if: You wish to customize. Also, if you have immediate need for TPO in 12 to 18 months or need global solution/support.

Mindtree

Profile: Mindtree is a global IT solutions company, with a TPM offering that leverages its experience from a custom-built deployment with a top 10 consumer goods company. It combines both TPM software and related services. Its packaged TPO offering is still under development.

Geographies covered: Currently marketing the product, but no significant geographic penetration yet.

Total users: 250 (Gartner estimate)

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

Strengths: The ability to combine analytical services and data management with a TPM (and eventually TPO) offering. Knowledge and experience in developing markets.

Challenges: First, is being a bit late on the scene in a relatively competitive market. Then there is the UI and functionality. We don't believe that at present it is suitable for developed countries because it lacks the ability to handle complex promotional tactics beyond percentage off discounts and top-down/bottom-up planning. These two factors, in combination, mean that uptake will be limited as most TPx decisions in developing countries are made at the headquarters level abroad.

Adjacent expertise: POS data management and cleansing services, MDM, retail execution and monitoring, digital coupon management, SCM and shelf visualization.

Differentiators: Some unique analytical measures such as "fair share index" for promotional exposure. Willingness to customize and host, as well as offer as SaaS. Also, has a mobile solution for viewing promotional activities and making approvals. It is called mPromo Mobile, and is based on SAP mobile and built on Azure for SaaS.

Prognosis: Very slow build in momentum, and then primarily in developing regions. As we stated previously, it will take three to five years to achieve the kind of momentum that other TPM/TPO vendors have today. 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. We also do not see the user experience being consistent with requirements of developed countries.

Evaluate Mindtree when: You seek an end-to-end TPM/TPO offering, with consultative and implementation services with a primary focus on developing countries. Also, if you would like to add TPM analytics on top of an existing TPM system from another vendor.

Avoid Mindtree if: You seek a TPM solution that is already tailored to developed countries, has average or above user experience, and proven integration to other legacy systems. Also, if you wish to use a third party other than Mindtree for deployment support, because it doesn't yet have a partner network to do so.

Nielsen (Having Acquired the Former G4 Analytics)

Profile: G4 Analytics was a SaaS-based, integrated TPM/TPO vendor, with origins as a BI consulting firm. It is now part of the Nielsen Price and Promotion business since February 2013 and, specifically, called Revenue Management Optimization (RMO). G4 was mostly a services company, with some software solution embedded. With the acquisition and replatforming, it is now more balanced between software and services.

Geographies covered: North America 40%, Latin America 15%, Europe 35%, Asia/Pacific 10%.

Total users: 5,000+ RPO users, but not specifically TPx.

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

Strengths: Part of a broader offering, including price and promotion, marketing mix modeling, retailer/shopper analytics and loyalty data. This allows for analysis from the most strategic level, like marketing mix modeling, and down to the customer-end-event level. It also broadens the expertise to include elements of what was traditionally part of category management into a single set of tools.

Challenges: Garnering the interest of integrators that advise on TPx solutions, although Nielsen does all of its own implementations. The solution is complete, but the UI is just average and very gridlike.

Adjacent expertise: Remote monitoring of retail execution KPIs, DSR, data mapping and harmonization, data cleansing, shelf management/visualization and marketing mix modeling.

Differentiators: Having all relevant data and solutions in a Hadoop environment for high scalability and performance. Expertise in experience in providing on-site personnel to help the client run the solution(s) and perform the analysis. Key metrics are already embedded or can be configured. Can optimize at brand or family level. A very tabular layout to the navigation, with lots of sorts and filters. The analytical capabilities and data visualization are way above average. Matrix approach to product pricing, based on modules, categories, countries and SKUs.

Prognosis: The former G4 lacked a serious TPM offering, but with additional resources and focus Nielsen has created a TPM that is viable as a stand-alone or in concert with TPO. This gives Nielsen a formidable arsenal to compete with all other vendors in the space in most any tier. It is getting momentum, and we expect it to take a position among the four or so leaders in the space in the next 12 to 18 months.

Evaluate Nielsen when: You want a truly end-to-end solution across the entire promotional cycle that can be delivered as SaaS. Also when you seek global support and deep analytical and market expertise.

Avoid Nielsen if: You want an on-premises solution or need a third party to help with selection and implementation. Also, if you are really looking for a point solution to act as a trade promotion checkbook.

Oracle

Profile: Oracle is a pioneer in both TPM and TPO. Both solutions are frequently 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, but no specific data available.

Total users: 12,000 (Gartner estimate)

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

Strengths: Oracle has both breadth and depth in TPx because of its tenure in the space. It has arguably the broadest product offering of enablers to TPx such as marketing, social media and demand data management. It has also demonstrated an ability to effectively scale down to Tier 2 and even Tier 3 where its close competitors have not. It is also continually improving its usability. Its vision for this space is second to none, and its partner network is vast.

Challenges: Oracle doesn't offer a SaaS for TPx on its own, but rather through a partnership with ITC Infotech. But the ITC Infotech relationship can be confusing for buyers when trying to understand who is providing which components and services. Also, COGS-based licensing models are out of fashion and particularly odious in high-growth and acquisition situations. Oracle is a complex vendor, with many products and business units. At times, there is a perception of in-fighting that does not favor the customer. Some product enhancements, like marketing mix modeling, would complement the existing analytical capabilities and ensure that Oracle does not fall behind in this area.

Adjacent expertise: ERP systems, DSR, food service, supply chain, retail execution and monitoring, e-commerce, loyalty, marketing analytics, social CRM and hardware that is optimized for the solutions that run on it.

Differentiators: Greatly improved graphical rendering of promotional plans, with enhanced use of hovers to expose underlying data, ability to plan at SKU or product level, new ability to do clustered promotions and the ability to do TPO, based on shipments, if POS data is not an option. The solution offers full predictive capabilities, including cannibalization, halo effects and optimization at a category level or for the entire promotional cycle. The user experience is way above average at the transactional and analytical levels, compared to competition. We liked that an optimization scenario is done through a pop-up to best utilize the available screen space.

Prognosis: Oracle will remain a leader in TPx into the foreseeable future. It has the expertise and product offerings that are appropriate for all tiers. It is also one of the most relevant TPx vendors for durable and semidurable goods companies. We would like to see an improved pricing model that allows user organizations to better leverage their TPx investment.

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 just seek a basic checkbook TPM solution.

SAP

Profile: SAP is an enterprise software vendor with integrated TPM and TPO. Since the last report, it has continued to step up its usability and vision to be on par with the rest of the marketplace. But more importantly, it has brought in more industry expertise and made it the face to the world instead of the technology side. In late 2013, we began to see a new attitude which we would describe as, "we will win because we will be better, not because we rely on integration stories or because we are SAP." We applaud this new approach.

Geographies covered: North America 40%, Latin America 5%, Europe 45%, Asia/Pacific 10%.

Total users: 16,000

Tiers represented: All. Very diverse in industry subsectors.

Strengths: Growing momentum in TPO. SAP name recognition with IT organizations. Processing power and ability to multitask as delivered by Hana. Continued momentum in China. More of the embedded Business Objects capabilities coming to the surface.

Challenges: Many highly customized instances that will have to be upgraded. Reclaiming TPO opportunities that decided in favor of competitors, because SAP was late to the game. Being relevant to many Tier 3 and some Tier 2 companies until it can move to the cloud. Continued focus will also be a challenge; we have seen several instances of ebb and flow in SAP's commitment to move to a leadership position. It should also re-evaluate COGS-based pricing that favors growth and provides leverage for its customers.

Adjacent expertise: ERP and traditional CRM capabilities, such as contact center and supply chain, marketing analytics, DSR, retail execution and monitoring, and S&OP.

Differentiators: Improved analytical capabilities like drag and drop for calendar, green/red/yellow confidence bands for promotional outcomes and ease in specifying TPO constraints. We also like the guided approach to setting up or optimizing a promotion. Very user-friendly what-if dashboard.

Prognosis: SAP is advancing faster than we previously predicted. It is now solidly in the pack and has the potential to close in on best-of-breed solutions over the next two to three years if it stays on this course. But winning back TPO users that have gone elsewhere will be difficult because TPO is particularly sticky given the work required to tune the predictive models. By putting more business-centric personnel in the field to manage customer relationships and avoiding protracted customization projects — and all customization for that matter — SAP can focus resources on its vision and taking a leadership role.

Evaluate SAP when: You use SAP for ERP. A time is not-too-far-distant when we can see SAP TPx on top of a non-SAP ERP, but not quite yet. But also when you seek a competent solution with global reach/support, and improving vision.

Avoid SAP if: You find you may have to customize. We believe it to be more expensive and time consuming than customizing most competitors' products. Also, if you have an immediate need for SaaS. It is in the works, but not ready yet.

TABS Group

Profile: TABS Group is a TPO solution provider, with a focus on delivering value through a combination of solution and rigorous consultancy that includes more of what was traditionally included in category management.

Geographies covered: North America 100%.

Total users: 350 (Gartner estimate)

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. Enterprise licensing arrangement based on categories covered and services rendered, instead of seats or COGS. Rapid TPO deployments, including ability to deliver a fully operational prototype in four weeks. Expertise in data harmonization required to drive meaningful and accurate predictions.

Challenges: Continuing to strike a balance between software and service by forming more product-oriented, complementary relationships.

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. Can look at multiple brands for a given period of time, as well as impact of ads. Looks at everyday low price (EDLP) pricing to determine profitability.

Prognosis: TABS will remain relevant in TPO, market analytics and related services, primarily in North America. It has the potential for all three tiers, but Tier 1 tends to believe it has to pay dramatically more for these capabilities and do so on a more global basis, even though the vast majority of geographies still don't have the data to support these types of analyses.

Evaluate TABS Group when: You have a transactional system, but want to make the move to more analytical, want services and expertise as well as software, and need it delivered in a cost-effective and user-friendly way.

Avoid TABS Group if: You primarily seek a transactional system, but don't believe that analytics can be a competitive advantage. Also, if you need a global footprint. TABS has the ability to grow with you, but does not yet have a presence on multiple continents.

T-Pro Solutions

Profile: T-Pro is a multitenant SaaS TPO solution designed to work solo or integrated to a TPM system. It is ERP and TPM agnostic. T-Pro is new to the Panorama this year, and a relatively new startup.

Geographies covered: North America 100%.

Total users: 155

Tiers represented: Tier 2 and Tier 3, primarily food and beverage and pet care.

Strengths: Provides postevent analysis if your TPM solution is weak in this area. Makes predictive modeling relative easy, with few screens required. Any user can handle data cleansing and anomalies, without being a statistician. Very "modern" pricing structure, based on the number of customers and categories you wish to plan for as opposed to seats or financials multipliers. And a maximum cap so that you don't pay more as you grow. Also a $15,000 pilot option as a low-cost test of the solution. Very detailed and robust "hovers" in visualizing the promotional calendar.

Challenges: The solution is based on looking at baseline/promotion graphics, which is a simple and logical way to do things, but may take some getting used to. It is slightly ahead of its time in targeting Tier 2 and Tier 3 users, while much of the TPO traction is with Tier 1 companies.

Adjacent expertise: POS data management and cleansing.

Differentiators: Totally browser-based, designed to run in the cloud, but could work on-premises as well. Ability to plan at various levels of aggregation. Strong-if-not-unique capabilities in accommodating free standing inserts (FSIs) in the promotional mix.

Prognosis: An excellent TPO option for Tier 2 and Tier 3 companies.

Evaluate T-Pro when: You want a low-risk approach to TPO and the ability to upgrade your postevent analytics.

Avoid T-Pro if: You want more of a services approach, believe that TPO should cost a million dollars upfront or your initial phase is outside of North America.

UpClear

Profile: A new company on our Panorama with a SaaS-based TPM offering that has quickly moved into a global presence with offices in New York, London and Hong Kong, supporting users in 14 countries, including Russia, China and Indonesia. It was a consulting firm from 2002 to 2007, and moved its IP into software in 2008.

Geographies covered: North America 35%, Latin America 0%, Europe and Africa 45%, Asia/Pacific 20%.

Total users: 1,400

Tiers represented: Tier 2 and Tier 3.

Strengths: Relatively broad geographic footprint for its size. Modern pricing structure consisting of no money down for deployment, pure PUPM (per user per month — in this case about $175) ongoing cost and no minimum term for the contract. Despite this, it boasts 100% client retention over the last five years. Strong partnering network.

Challenges: It will need a TPO option to stay relevant. No ability to work offline. It is a bit more gridlike than we prefer, but some people like an Excel-like experience. In particular, the rendering of the promotional calendar needs to be more Gantt and less Excel grid.

Adjacent expertise: None at present.

Differentiators: Ability to change dashboard to suit individual taste. Yammer for social collaboration. UI is better than average, particularly for SaaS. Currently, Tableau Software as an OEM analytics offering.

Prognosis: This is a good TPM option. It has all the functionality you need, but delivered at a low-price and risk-free option.

Evaluate UpClear when: You need a global Tier 2 or Tier 3 solution, without the corresponding price.

Avoid UpClear if: You need TPO immediately or you may be inclined to customize.

Wipro Promax Analytics Solutions (WPAS)

Profile: WPAS is an integrated TPM/TPO offering based on Promax from Australia, but acquired by Wipro in April 2012. In our previous research, we predicted that WPAS would struggle to integrate Promax and stagnate in the marketplace. This has proven to be wrong, as WPAS has gained momentum and prominence globally. To its credit, it was able to effectively combine an entrepreneurial Australian company with a global Indian services firm, while overcoming some technology shortcomings.

Geographies covered: North America 31%, Latin America 3%, Europe 20%, Asia/Pacific 46%.

Total users: 3,100

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

Strengths: Unwillingness to create any one-off solutions that do not provide customers a clear upgrade path to later versions. Strong services delivery capabilities through the extended Wipro organization. We have had a peek at the new UI and it is above average for both transactional and analytical functions. The ability to utilize predictive models other than their own. New BI platform with Microsoft suite and ability to build in-memory cubes.

Challenges: Despite an improved UI, there are two relatively weak areas such as the visualization of the promotional calendar, and rendering of baseline/promoted information. These are not major challenges but should be addressed. The solution will also have to move to the Web and away from Citrix. This is well underway, but will need to continue forward beyond just obtaining parity with the market to actually being best of breed. Penetrating Tier 1 companies that rely on select system integrators to steer them regarding these technologies will be difficult because WPAS will do all of its own downstream work.

Adjacent expertise: POS data management and cleansing, digital solutions to measure on-shelf performance.

Differentiators: Ability to outsource entire business processes like clearing deductions to Wipro. Good use of hovers and drill-downs. Strength in predictive modeling, including cannibalization, halo effects and modeling product movement through indirect channels. Collaboration tools like Yammer to provide a more social approach to the TPx cycle.

Prognosis: WPAS has made it through the crucible of integrating two very distinct companies, and we see it becoming a global player. As the user experience improves, the global expansion will accelerate.

Evaluate WPAS when: You seek a combination of transactional TPM, analytical TPO and global services wrapped around all the associated business processes. But be sure to look at the new version released through 2014 and not the old one.

Avoid WPAS if: You wish to customize for some requirement that cannot or will not be incorporated into the next release. Also, if you need a third party for the evaluation/selection/deployment process.

XTEL

Profile: A veteran TPM/TPO vendor, with a significant presence in Europe and a history of innovation. It offers a highly configurable solution, based on Microsoft Silverlight on the Web and Touch-HTML5 for mobile.

Geographies covered: Europe.

Total users: 2,500

Tiers represented: All.

Strengths: Excellent user experience, strong customer references and retention, innovative approach to analytics, comparable strength in both on-premises and hosted (Amazon Cloud), good partner network for its size and strong product road map, including voice recognition. Can deploy TPM in 15 weeks.

Challenges: The primary challenge stems from getting a chance to play on the global stage. XTEL could play globally and is making more and more of a mark on Europe by beating many of the global players, but has not had chance to compete on a global basis.

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

Differentiators: User experience. Strong analytics and ability to render metrics in an engaging way. Has complete TPO capabilities, including baseline/promoted analytics. Nicely lays out two scenarios side-by-side for evaluation. Can copy from one scenario to another. Very simple step for specifying constraints in optimization process. Can even create a promotion from a tablet device, which could be Apple, Microsoft or whatever. The demo we saw was both Microsoft and HTML5. Promo calendar dashboard is really appealing.

Prognosis: XTEL will continue to be strong player in Europe, with a differentiated product that delights users. With the right partnering circumstances, it could be leveraged globally.

Evaluate XTEL when: You favor a strong user experience, good analytics and European expertise, as well as when you need integrated retail execution and monitoring.

Avoid XTEL if: You have immediate needs for a global deployment. XTEL is extending its reach to Latin America and Africa/Middle East, but still does not have a global trace record.