Gartner Research just released its new Magic Quadrant for Sales & Operations Planning Systems of Differentiation (S&OP SOD). They say that compared to just two years ago “there have been significant shifts in the relative positions of several vendors.”
Gartner says that the moves have been driven mainly by a significant uptick in overall S&OP maturity of the users it surveyed, which required S&OP solutions to keep pace with increased user demands. Some vendors did. Some not so much. Hence the shift.
One example of a changing user requirement is the ascendancy of supply chain modeling to the highest priority in Gartner’s Market Ranking of S&OP Capabilities. Conversely collaboration support with internal stakeholders has dropped from the #1 priority to “table stakes”, as one analyst calls it.
Integration with operational planning “Systems of Record” (SCP SORs) also moved up, from #3 to #2 priority. Gartner explains that historically, S&OP solutions have been separate from operational SCP SORs. “This reflected past user requirements for a more operationally oriented Stage 3 maturity S&OP process where the focus was on areas such as internal collaboration. Today, companies are generally further along in their journey toward (or beyond) Stage 4 maturity. Therefore, users' requirements are more oriented toward enterprise-level S&OP, with strong supply chain modeling, financial impact analysis and tight integration back into the operational planning environment.”
Source: Gartner Research, 2017
Other high priority capabilities include:
- Support for global deployments
- Financial impact analysis and planning (including predictive financial reports)
- Performance management and analytics (via scorecards and dashboards)
For more on user S&OP priorities see the full Gartner report here.
Source: Gartner for Supply Chain Leaders Toolkit, 2014
Gartner’s five-stage maturity model specifies distinct technology capabilities to support each level of planning process maturity. “Stage 4” maturity is key to Gartner’s analysis because they define S&OP SOD software as solutions that help to enable a Stage 4 (and higher) S&OP maturity. They define Stage 4 S&OP users as companies that concentrate not only on the traditional focus of balancing supply and demand, but on hitting revenue targets profitably by evaluating supply chain trade-offs through analytics and modeling. At this level, companies run a “demand-driven, profitable supply response across an increasingly extended supply chain, taking into account internal and trading partner capabilities.” They understand the cost-to-serve of individual supply chain segments and leverage customer collaboration to help improve demand sensing and demand shaping. They strengthen supplier cooperation; link supply chain, marketing, and product development for product launches; and factor financial impacts in plans.
Very few companies have attained the highest level maturity — Stage 5 or “Orchestrate”— where S&OP helps coordinate, align, and synch up network-wide decisions across an integrated planning landscape. This stage sports “… full alignment between innovation and operational decision making... S&OP supports the company’s growth plan… creates and shapes market demand and is fully driven by the business strategy.” Gartner says that Stage 5 S&OP maturity requires “a move toward algorithmic SCP with appropriate automation of key elements of decision-making.”
Gartner divides its quadrant into Leaders, Challengers, Visionaries, and Niche Players. Leaders offer strong capabilities for S&OP SOD vision and execution and provide highly rated user requirements like supply chain modeling and financial impact analysis of plans and scenarios. Challengers are strong on execution but lack elements in their vision. Visionaries have a robust vision, understand market direction, and have a strong roadmap and a clear vision of plans to enhance their solutions; they understand “how horizontal and vertical integration is key to the future value proposition of S&OP solutions.” Niche Players, while viable for S&OP projects, have weaknesses in vision and execution.
Gartner evaluated, in alphabetical order, the following vendors: AIMMS, Anaplan, Arkieva, Demand Solutions, Infor, JDA, Jonova, Kinaxis, Llamasoft, Logility, o9 Solutions, OM Partners, Oracle (VCP), Outperform, QAD (DynaSys), Quintiq, River Logic, SAP, Steelwedge, and ToolsGroup.
Click on the link below to view a copy of the full Gartner S&OP SOD Magic Quadrant report:
Top Technology Characteristics
Users in the survey said that the top technology characteristics that impact their ability to achieve their S&OP goals were:
- Internal enterprise collaboration across global deployments
- Supply chain modeling
- Tight integration with the SCP SOR
- Support for global deployments (almost 70% of the companies surveyed are deploying an S&OP SOD as a single global instance that supports all business units)
- Performance management and analytics
- Financial impact analysis
- Configurability, especially for different process designs
- Simple UI to help drive adoption (often Excel or Excel-like UI)
- Scenario management
Gartner’s Definition of SOP
Gartner defines a sales and operations planning (S&OP) system of differentiation (SOD) as a software solution that supports a Stage 4 or higher-maturity S&OP process. It may do this in conjunction with other supply chain planning (SCP) SODs (such as supply chain modeling, multi-enterprise inventory optimization and demand sensing), and with the support of a foundational SCP system of record (SOR). Gartner defines the S&OP market as a subsector of the SCP market.
Gartner says the following criteria were used to evaluate the vendors in this magic quadrant:
- Ability to Execute Product/Service: Core goods and services offered by the vendor for the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships.
- Overall 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.
- Sales Execution/Pricing: The vendor's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel.
- Market Responsiveness/Record: 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.
- Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers.
- Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, or service-level agreements.
- Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.
- Completeness of Vision Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen to and understand buyers' wants and needs, and can shape or enhance those with their added vision.
- Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.
- Sales Strategy: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.
- Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements.
- Business Model: The soundness and logic of the vendor's underlying business proposition.
- Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.
- Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.
- Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.