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Service support and service delivery can easily employ 1% to 3% of your organization's total employee base, and they can consume up to 10% of the total IT budget. ITIL process models provide a set of common definitions and descriptions that can be used as a starting point for an improvement program. Likewise, maturity models like CMM provide a framework to assess the maturity of processes and to establish targets. (Editor's note: Start now -- this research provides what you need to get started.)
Large enterprises have fewer solutions to choose from in the wake of Oracle's acquisition of Siebel. On-demand solutions continue to proliferate as existing vendors gained significant midmarket wallet share; new on-demand incentive compensation offerings popped up from vendors like Centive and Xactly.
As packaged vendors converge application development on four major middleware ecosystems that provide SOA design, enterprises must selectively determine how many of these ecosystems and related projects can and will be supported. A recent Forrester survey identified 11 business-driven projects undertaken by 53 early adopters that leverage common SOA building blocks.
Multinational companies in most vertical industries are increasingly attempting to manage distributed supply chains and 54% plan to increase their budgets. But widely accepted supply chain strategies are inherently ill-suited for these new challenges; 59% of respondents did not achieve expected ROIs. Forrester's research into five emerging technology and business themes -- Digital Business Architecture (DBA), experience-based differentiation, the new IT ecosystem, Social Computing and the X Internet -- will help companies cope with -- and profit from -- the changing business climate.
Order Management Cycle (OMC) functionality has traditionally represented the integration of ERP, CRM, and SCM processes
to achieve a macro process: opportunity-to-cash. Forrester evaluated leading OMC vendors across 115 criteria and found that SAP mySAP Business Suite, Sterling Commerce/Yantra, and Comergent established early leadership in attaining order hub designation -- thanks to their ability to deliver the right balance between business process expertise and order hub infrastructure. As always, readers are encouraged to view detailed product evaluations and adapt the criteria weightings to fit their individual needs through the Forrester Wave™ Excel-based vendor comparison tool.
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Market Turmoil Continues
An extraordinary year of market consolidation and change has created exciting opportunities for exploiting technology to improve business processes as well as new risks for organizations making choices and vendors trying to sell to them. In Oracle Versus SAP In Enterprise Applications: Let The Battle Of Architectures Begin! our analysts collaborated with the Application Development Infrastructure team's John R. Rymer to look at the two largest vendors, SAP and Oracle. The differences in their approaches to the next generation are stark: Oracle will continue to build through acquisition, SAP on internal development and partnerships. Oracle will run only on its own database, SAP's only on its own middleware. SAP promises to ship its next-generation suite in 2007, Oracle in 2008. Battlegrounds: master data management, analytics, and repository architectures.
SAP has stronger market momentum, better articulated value for next-generation apps, and a better partnership strategy. But Oracle's strong middleware platform and greater support of standards make it a better choice for customers who will rely on custom development as well as packaged apps.
Meanwhile, Infor's acquisition of SSA Global Technologies unites more than 30 legacy, iSeries, and client/server ERP vendors such as Baan, BPCS, BRAIN, Infinium Software, Lilly Software Associates, MAPICS, and System21 under one roof. A significant alternative to SAP or Oracle for midmarket customers looking for process manufacturing, discrete manufacturing, distribution, and supply chain solutions, they share similar customer strategies, improved economies of scale, and will now have increased reliance and influence on IBM. Long-term convergence, interoperability, and the lack of corporate-level finance and HR applications will be significant challenges.
Manugistics' Sale To JDA: Expected Fate, Unexpected Buyer details another shift. The fact that JDA is the acquiring party creates questions regarding the long-term fate of some of Manugistics' consumer goods, aerospace and defense, and travel and hospitality clients. The incompatibility of Manugistics' J2EE development platform with JDA's public commitment to Microsoft .NET and the overlap of the vendors' demand management tools are additional reasons for concern.
Where are Redmond's troops in all this? In Microsoft Dynamics Emerges From Wave 1, we conclude that dependence on underlying Microsoft technology releases will continue to delay the time-to-market of the next-generation converged product. In Wave 1 enhancements near completion, Microsoft plans to deliver an increasingly role-based user experience, portals and collaboration, contextual business intelligence, and Web services-based integration. Wave 2 will include enhancements that drive further standardization across the product lines, including data, business processes, and roles. Microsoft plans to double its investment in partner ecosystem development and has begun a $140 million Microsoft Dynamics and a $500 million "people-ready" advertising campaign.
Finally, Lawson announced the completion of its acquisition of Swedish ERP software vendor Intentia, which has taken a year to come to fruition. Achieving value from the acquisition will depend on how quickly Lawson is able to achieve technical integration and product/sales synergies across the two product lines.
What's next? More turmoil, no doubt.
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The Forrester Wave™: eService Suites, Q2 2006
Forrester evaluated leading eService suite vendors across more than 80 criteria and found that KANA's mix of business process, industry-leading Web collaboration, and proven scalability gave it the highest overall score of the seven products included in our evaluation. Other Leaders include ATG, with a winning combination of eCommerce and eService, and KNOVA, with high ratings for forum capabilities and search technology. Both Talisma and eGain placed in the Leader category as well.
CRM Professional Service Provider Series
A collaboration with Forrester's IT Services team has resulted in a rich group of documents that spans the CRM PSP market. In the Market Overview, we note that spending will remain robust due to the shift from customer functional management to customer process management, the need to deliver a better "branded" customer experience, the shift to service-oriented architecture (SOA) as the basis for technology solutions, and the growth of high-value CRM offshore/near-shore services providers. However, four out of 10 enterprises would not fully recommend their CRM PSP to others, demonstrating that choosing a PSP is a risky decision.
We look at the strengths and weaknesses of the six types of CRM PSPs: 1) management consultants; 2) global full-service systems integration firms; 3) North American regional specialists; 4) European regional specialists; 5) offshore/near-shore technology services providers; and 6) software vendor professional services organizations (PSOs). North American CRM PSPs are good choices for clients seeking unique abilities that match specific needs. The CRM services and industry knowledge they offer may be deep, but they are not as broad as the larger, global CRM PSPs, which deliver a full range of services but may not provide best value.
Our interviews show that companies that do not match provider strengths with project priorities have less chance of project success. Finally, the offshore PSPs are becoming an attractive choice. But with the exception of some technical consulting categories, consulting is a new skill set requiring domain expertise, an understanding of the client's local culture and market, an on-site presence, and advanced training in business issues. Indian vendors typically lack these capabilities and have to make significant investments to provide them.
From The Editor
As acting Research Director of the Enterprise Applications team, I found this issue of First Look a delight to compose -- there is a wealth of deep, action-oriented work being produced by this team. Hope you found this brief survey helpful, and please feel free to pass on your thoughts and comments to me at mervadrian@forrester.com.
Merv Adrian
Senior Vice President
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