Gartner Releases a New S&OP Magic Quadrant
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.”
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.
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.