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On February 28, SAP America announced a deal to buy Retek, a leading provider of retail applications. The acquisition -- valued at almost $500 million -- gives SAP's retail presence a much-needed boost and provides SAP with an opportunity to become the dominant force in the retail applications market.
At the National Retail Federation (NRF) show, retailers and their suppliers expressed their commitment to supply chain efficiencies as the only hope to improve customer satisfaction and fuel growth. Inventory management, collaboration, and profit optimization took center stage.
With enterprise CRM software reaching functional maturity in more areas, "feature wars" are now less important for deciding on the best CRM. Organizations must evaluate vendors more carefully with respect to the quality of the application ownership experience.
Forrester performed hands-on testing of Siebel CRM OnDemand, SalesCenter, NetSuite, Salesnet Extended, and NextSale against approximately 150 criteria. Read the scorecard summary for key findings from the evaluation. To view the complete scorecards and product ratings, access Forrester's interactive TechRankings tool.
European firms have different priorities and constraints than North American firms; this will drive the enterprise apps landscape across the two regions in different directions over the next decade. Cautious Europeans, with fragmented legacy enterprise apps, believe that SAP supports apps consolidation at a lower cost than alternative providers. European firms will be more willing than those in North America to trade the flexibility of a "do-it-yourself" approach for the security of standardized business patterns. Of our respondents, 88% considered the lack of process flexibility of their installed enterprise applications to be a constraint on their ability to adapt to different markets.
With a 22% net income year-over-year growth in Q3 2004, RadioShack exemplifies a retailer that focuses on continuous business innovations. For the past 18 months, RadioShack has partnered with Celarant Consulting to devise a strategy for reinvigorating growth. The team came up with a simple yet powerful road map to improve its customer experience and capitalize on the scale of its distribution network.
Interest in applications to support financial planning, budgeting, and forecasting is currently high -- a recent Forrester survey shows that 35% will invest in this software within the next 12 months. This is driven by two primary factors: 1) the need to automate existing processes by replacing spreadsheets with enterprise-class data management and collaboration capabilities, and 2) the need to innovate forward-looking financial processes for better management, agility, and control. We expect this market, currently $330 million in license revenues worldwide, to grow by 14% during the next five years to reach $565 million in 2008. The vendor landscape for budgeting and financial planning applications consists of three main categories: 1) business intelligence (BI) vendors; 2) ERP application software vendors; and 3) specialized best-of-breed vendors focusing primarily on this application category.
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Dear subscriber,
Many of you have asked for a more specific focus on Enterprise Applications coverage, so I'm pleased to introduce a quarterly First Look dedicated to this team's work. We have both North American and European analysts active in creating Enterprise Applications research, as well as close partnerships with analysts in the Financial Services; Government; Devices, Media, & Marketing; and other teams.
With dramatic changes happening to the vendor landscape in all areas of enterprise applications, understanding how mergers, acquisitions, and technical achievements affect your spending and your existing investments is critical. If you haven't already signed up for the Enterprise Applications First Look on Forrester.com, I urge you to subscribe and keep up with these developments. The Enterprise Applications newsletter will be edited by John Ragsdale, the research director for the team. John spent more than 10 years managing contact centers for a large US retailer, later moving to Silicon Valley to lead product management for early CRM vendors.
If you would like to continue receiving this newsletter on a quarterly basis,
you must either reply to this email using "Subscribe" as your subject line or visit our Email Subscriptions page. As always, First Look is free of charge, and you can opt not to receive it at any time.
Merv Adrian
Senior Vice President
mervadrian@forrester.com
Beyond Order-To-Cash
Business pressures to grow market share, improve margins, reduce time to market, and retain customers with existing enterprise application investments compel enterprises to re-examine their existing order management cycle (OMC) strategies. With multiple categories of vendors offering order management solutions, business complexity across supply and demand chains should be the strategic driver in determining the appropriate solution fit. Companies looking to implement OMC strategies immediately will not find a single vendor solution.
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Demand chain complexity ranges from the simple -- a single channel -- to the complex -- multichannel order capture. The complexity level descriptions are listed below.
The strategies you choose will depend on both the complexity of your enterprise and the industry you serve. Use the demand and supply chain complexity scale as a reference point.
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Simple OMC. Companies faced with simple channels and simple sourcing scenarios are best served by simple OMC. Enterprises in this group include industries like aerospace and defense, midmarket companies, and process manufacturers that typically face a majority of orders coming from one or two sources. A single-instance approach will serve these enterprises best, with benefits like reduced total cost of ownership (TCO) and quicker path to order-to-cash.
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Multichannel order capture. Organizations with complex channels and simple sourcing scenarios should begin with CRM solutions. Typically, telecom, retail goods, and financial services enterprises face the challenge of multichannel order capture, partner relationship management, and multiple vendor catalog requirements. Building on solutions provided by CRM and eCommerce vendors may benefit this category the most because these vendors provide a majority of the front-end functionality and integral back-end requirements.
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Distributed order fulfillment. Enterprises faced with simple channel and complex sourcing start with ERP and SRM. Industries like groceries, high-tech components, and distributors face challenges in tracking the order status upon submission to various suppliers and outsourced vendors in their trading community. ERP suites and SRM vendors have accepted the challenge to extend their architectures to provide these enterprises with requisite functionality.
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Complex OMC. Complex channel and sourcing solutions are being developed. Enterprises like high-tech, consumer goods, third-party logistic companies, consumer durables, and heavy equipment manufacturers require a more complex OMC solution. Unfortunately, not one vendor to date has successfully integrated the complex OMC.
Please Join Us At GigaWorld
Forrester's GigaWorld IT Forum 2005 will be held in Dallas from May 2 to 5. The Enterprise Applications team and colleagues have a number of key presentations on the agenda this year, including:
- Hosted Sales And The Trend Toward Simplicity -- Liz Herbert
- Rethinking Call Center Outsourcing -- Chip Gliedman
- Outsourcing R&D And Innovation To Drive Growth -- Navi Radjou
- The Battle For Multichannel Ownership -- Jost Hoppermann and John Ragsdale
- Beyond SOX: Strategies For Easier Compliance And Better Corporate Governance -- Paul Hamerman
- Managing The Total Cost Of Global Product Sourcing -- Noha Tohamy
Upcoming Research
The team has some important research coming up in the next few months.
- Defining Operational Risk Management In Supply Chains -- Noha Tohamy
- eService Forrester Wave -- John Ragsdale
- The State Of B2B Marketing -- Elana Anderson
- Updating The Supply Chain Visibility Landscape -- Noha Tohamy
- Enterprise CRM Forrester Wave -- William Band
- How Sales Is Responding To The Changing Buyer -- Erin Kinikin
There will also be numerous short pieces driven by Client Choice selections, Inquiries, and ongoing events. We hope you'll follow closely, and as always, that you'll send us your comments on the research you read. We read every comment, and your input has a big impact on our focus and content selection. View a full list of Forrester's planned research from the Forrester.com home page.
Upcoming ForrTels
ForrTels are live, interactive, hourlong teleconferences incorporating a simultaneous WebEx slide presentation by a Forrester analyst, followed by an open forum for questions and discussion.
Supply Chain Collaboration: Market Update
Noha Tohamy
March 18, 2005, 11 a.m.-12 p.m. Eastern time
Innovation Networks Reshape Software Industry Business Models
Sharyn Leaver and Navi Radjou
March 23, 2005, 1-2 p.m. Eastern time
Beyond Order To Cash: Form Follows Process In Order Management Cycle Strategies
R "Ray" Wang
April 7, 2005, 1-2 p.m. Eastern time
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VIEW ARCHIVE: View past issues of First Look.
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1 866/FORRESTER (1 866/367-7378) or +1 617/613-5730.
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