Discover the 4th part of our demand planning series on how to pick the right demand planning software. Author: Nicolas Commare, director of Colibri.
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Choosing a demand planning software is easy when you know most of the existing solutions. But if you do not know the strengths and weaknesses of each solutions it can quickly become a nightmare.
In that case you will probably start your research online, you will have to navigate between almost 100 different softwares that will not necessarily disclose all the functionalities available or the costs involved.
Obviously, as I am myself founder of Colibri, a demand and supply planning solution, I will tend to recommend my solution, but not at all costs. I believe that there are a few characteristics that should help anyone who’s looking for a demand planning solution, I listed them below. And if Colibri is not answering your need I will be happy to point you toward another solution better suited for you, ask me in the comments!
Number 1: The functional scope to cover
Some solutions cover the full supply chain process, others are specific to one functional scope. If you benchmark a solution, I recommend calling a company already using the solution to check the functional scope with them and have an unbiased opinion.
Colibri covers the supply chain flows (S&OP, Forecasts, Retail, Distribution, Demand and sourcing) but not the manufacturing planning.
Number 2: Maturity of your team & process
Solutions can have different level of complexity and customization. It is important to note that the complexity and cost of the solution, the project, the maintenance and training may be linked to the customization chosen.
Colibri is a solution based on best practices with low customization capabilities, but on another hand, training and projects are simple and not expensive. GoToMarket and ROI are quick.
Number 3: On premise, hosted or cloud
The technological ecosystem is changing, historical best of breed solutions are still on-premise and it will be really complex for them to move to the cloud (because they have to maintain all the specifics of their customers). Two choices are available in that case: moving to a private hosting, which is kind of the same as an on-premise solution or launch a new product.
Facing those solutions, cloud native solutions are growing quickly, making the comparison exercise even more complicated. In that case it is important to check which ones are investing in stability and security. CIO are giving a strong attention to these factors nowadays.
One big advantage of a cloud solution is the scalability and the regular roadmap of the solution. Usually after 4-5 years, on-premise solutions become obsolete and you must re-invest. If your cloud solution is sustainable you should not have this problem as it is common for cloud solution to regularly invest in R&D (you should make sure of this part when discussing with solutions providers)
Colibri is a native cloud solution, and as our customers’ security departments are strongly challenging us, we are consistently investing in IT security. Moreover, we chose the Cloud Microsoft Azure, who is making security one of its top priority.
Number 4: The costs
I believe there are 5 types of costs: project, licenses/subscriptions, hidden costs, costs for the future and cost of inaction.
Project Costs:
- A Colibri set up project usually cost around 30k USD.
- For bigger best of breeds or more customizable solutions the project can cost up to 300k USD.
Recurring costs:
- For on-premise solution, cost can vary from 70k to 300k USD. You will need to plan recurring cost of about 15% for maintenance every year.
- For Cloud solution, the cost is a monthly subscription, usually comprised between 4k and 25k USD
- Colibri price is usually between 1 700 and 10k USD, depending on the customer configuration.
Hidden Costs:
- Be careful on the potential hidden costs like AMS costs, database administration, upgrades… A highly customized solution will usually generate higher AMS costs.
Future planned costs:
- As we said previously, choosing today an on-premise or non-sustained solution means assuming the lifecycle of the solution will be short and after 3 or 4 years you might need to re-invest again.
Cost of inaction:
- Today most solutions are built to create quick prototypes and short set ups. It is usually easier and shorter to test the solution than spending time and money in building a RFP and analyzing the different answers. Companies can spend up to 6 months just to choose a solution whereas they could have just tested a cloud solution for one month and see if the solution answered their needs. You can always negotiate the contract length if you are anxious about commitment periods.
By doing so you are more agile, and you will have a return on investment before your competitors even started their projects (in the RFP logic).
Number 5: Vendor teams, ecosystem, ability to deploy
- Cloud solutions usually means globalization of teams and experts. It is likely that you will not have an expert available near all your locations and speaking to all your users.
- Depending the complexity of the project, the volume of support needed and the geography of your company and team, it is important to check the size and geographical presence of your software supplier and its partners. Be sure the consultants will be able to communicate correctly with your teams.
Number 6: Sustainability of the vendor
Every year there are some acquisitions and merge of IT software companies. Check the sustainability of your vendor’s strategy but also the sustainability of ownership.
In Conclusion
I would recommend to act your application strategy on people talents (in and out of your company)… the success of setting up or using an application always depends on the involvement of smart people.
The worst that could happen is to be inactive. As said previously, just imagine the cost of inaction… the non-cash profit that is created by doing nothing.
Competition today is tough, the long run winners are the ones taking decisions, testing and moving faster.
