Magic Quadrant for Transportation Management Systems, 2007

As more businesses recognize the need to improve transportation processes to reduce costs and to become more productive and efficient, the demand for TMS solutions continues to rise. These requirements are critical in business environments characterized by increasing business process complexity, resource constraints, and rising and volatile operation costs. In particular, the volatility and steady rise of fuel costs affect all shippers, carriers and logistics service providers (LSPs). Shippers with as little as $15 million in annual freight spending are now considering TMS solutions.

Planning and execution were traditionally the focus of TMS evaluations, but Gartner now finds buyers equally interested in the overall breadth of TMS, especially in such areas as procurement, freight audit and payment, collaboration and globalization. Leading TMS vendors continue to improve and expand the functional breadth and depth of their TMS offerings. Areas such as freight procurement, freight audit and payment, support for more modes of transport (for example, parcel, rail, air and private/dedicated fleets), global logistics, visibility/event management (track and trace), support for LSPs, asset-based planning, and execution and performance management add to the value of TMS.

Managing domestic transportation remains a primary focus for many TMS initiatives; however, supply chain globalization is driving additional TMS growth, and TMS support of global logistics has become a more-important consideration for many buyers in 2007's Magic Quadrant. Globalization in terms of international TMS deployment and multileg, multimode international shipment support is a bigger issue for buyers, as leading TMS vendors continue to invest in more-global transportation capabilities.

Software modernization is a significant driver of new application investments, including TMS. Major technology trends driving the supply chain management (SCM) market (including TMS) are the impact of service-oriented architectures (SOAs) and the emergence of business process platforms (BPPs; see "Achieving Agility: Implement a BPP Model to Support Static and Dynamic Processes"). Demand for agility and flexibility is increasing demand for applications that meet point-in-time requirements, as well as adapt to the changing needs of the business without extraordinary costs. The challenge in the TMS market is for vendors to build a strategy that enables them to meet the requirements for agile functionality, while shifting to delivering functionality on top of a BPP in the future. Vendors' strategies vary dramatically on this scale, and we expect the vendors' ability to respond to this strategic shift in the market to be a key factor that determines their capability to deliver attractive offerings to the market.

Several TMS vendors have been acquired during the past few years — Oracle bought G-Log, Manhattan purchased logistics.com, Sterling bought Nistevo, JDA acquired Manugistics, and Infor purchased SSA Global and ShipLogix — and more acquisitions are expected. Until recently, enterprise software vendors were not major players in the TMS market. The suite vendors were late to TMS, but they now have a more-compelling position and are becoming forces in basic TMS. Oracle, SAP, Infor, Manhattan, JDA, Sterling and QAD have made significant investments in TMS and have become viable contenders in many TMS deals.

TMS generically refers to a category of software that deals with the planning and execution of the external physical movements (transportation) of products across supply chains. Multiple subcomponents make up comprehensive TMS solutions across planning and optimization (load consolidation, routing, mode selection and carrier selection), execution (tendering loads to carriers, shipment tracking and trace, freight audit and payment), and visibility and performance management (global visibility, event management, business activity monitoring [BAM], track and trace, and analytics). At a minimum, TMS solutions are used to manage freight planning and execution. In addition, TMS suites have been extended to include all transportation management functions, from strategic planning and sourcing of freight through visibility of freight, payment services and audit capabilities.

In the TMS Magic Quadrant, we evaluate the following:

Strategic planning
Strategic sourcing
Tactical planning
Collaborative tactical planning
Operational transportation planning
Transportation execution and carrier communication
Load building
Freight rating
Parcel shipping
Freight payment and audit
Contract management
Freight billing
Visibility and event management
Analytics, performance management and BAM
Technology
Globalization

To be included in the 2007 TMS Magic Quadrant, vendors need credible TMS offerings and a vision for shipper-centric (or non-asset LSP), multimodal transportation planning and execution. Vendors must have live customer references using the TMS, as well as 2006 TMS license revenue of at least $5 million, or at least $10 million per year in hosted/SaaS (or managed-service) service revenue. Because of end-user demand for evaluations of other significant vendors' TMS offerings, we have also included TMS vendors that meet one of the following criteria, even if the offering does not meet the initial TMS criteria:

Major enterprise software vendor: The vendor must have more than $500 million in enterprise application software license revenue in 2006. (Many users have committed to enterprise application platforms and are interested in TMS solutions from the major suite vendors, especially their own providers.)
SCM suite vendor: The vendor must offer a suite of SCM applications and have at least $15 million in SCM software license revenue in 2006. (Many customers with significant investments in SCM suites are interested in evaluating the capabilities of an integrated TMS product.)
Unique vision or presence: The vendor must have a unique offering and a compelling vision for differentiation in the TMS software market, which Gartner considers to be worthy of being highlighted to users.

As noted above, we have not included stand-alone transportation point solutions in the areas of multicarrier parcel manifesting, fleet routing and scheduling, and global logistics execution and visibility. These are detailed in the sections that follow.

Stand-alone parcel manifesting is a separate market, with a separate set of user requirements and vendors, including Kewill and ConnectShip. However, we have evaluated the parcel-shipping vision and capabilities of vendors included in this analysis, because of the increasing integration of parcel-shipping capabilities in TMS solutions.

Stand-alone, fleet-based routing and scheduling solutions — such as those offered by the Descartes Systems Group, UPS and Paragon Software Systems — represent a separate market. However, we have evaluated the fleet/asset-based planning and scheduling vision and capabilities of vendors included in this analysis, because of the increasing demand for combined planning and execution across contract carriers, as well as dedicated and private fleets. Gartner has found growing (albeit nascent) integration of some fleet/asset capabilities into overall TMSs.

Stand-alone global logistics execution and visibility vendors, such as GT Nexus, LOG-NET or Management Dynamics, represent a separate market, with separate user requirements. However, globalization is an important aspect of 2007's TMS Magic Quadrant, and we have evaluated the global logistics vision and capabilities of vendors included in this analysis.

Transplace and Precision Software (a division of QAD) have been added to 2007's TMS Magic Quadrant. Transplace was included because, in addition to supplying a credible TMS as SaaS, it is also a managed service provider that offers a portfolio of services beyond product implementation and support to help customers manage their freight operations. Precision was added for two reasons: First, it was acquired by QAD, which is an ERP software vendor, and, although QAD does not meet our revenue threshold for enterprise software vendors, it has thousands of clients that are likely to be interested in TMS. Second, although Precision's TMS is a nascent comprehensive, multimodal TMS, it has a unique presence in the TMS market that makes it worth evaluating.

One Network did not meet our TMS-specific license/service revenue and other criteria for 2007.

TMS vendors' product breadth, depth and technology are highly rated components of their ability to execute, because the requirements for the most complex and sophisticated users in this market are so functionally intensive. Users with complex requirements and sophisticated operations focus intensively on the product. Less-sophisticated users might require less-functional robustness (see "Issues to Consider When Building a TMS Business Case and Evaluating TMS Sourcing Options") and could be satisfied with a wide variety of solutions. However, sophisticated users with complex requirements will want solutions in or near the upper quadrants. We evaluate vendors on each of the functional areas outlined in the market definition section of the Magic Quadrant.

Vendor viability and risk remain critical criteria, and we have rated these as standard in this evaluation. This is because, although viability is important, it should not overshadow product fit, vendor expertise, total cost of ownership (TCO), and service and support. Several of the vendors are small, and there are some viability concerns, but all other factors being equal, viability alone should not preclude users from considering these vendors. In addition, there is a significant discrepancy in size and scope of operations between the largest vendors (that is, SAP and Oracle) and the smaller vendors; hence, scoring viability too high would unreasonably bias the model based solely on vendor size.

Sales execution and pricing were not significant differentiators in the TMS market until recently. However, as smaller shippers enter the TMS market, affordability has become more important. Although functionality remains important, these organizations typically require less-robust TMS capabilities, making price a more important evaluation criteria. Price is likely to drive many of the decisions to move to SaaS TMS. Likewise, because competition has heated up at both ends of the market, buyers have more choices, which will fuel some price competition.

Market responsiveness and track record are ranked high, because the TMS market is rapidly evolving, and TMS solutions must keep pace to remain relevant. We assess the historical and current ability of vendors to add to and enhance their TMS solutions to keep pace with the wants and needs of TMS users. Users need to be confident that their vendors will continue to invest in their TMSs to keep them relevant and competitive. For example, during 2007, we have seen leading vendors responding to user demands in such areas as broader support for global transportation, better support for asset-based planning and execution of private and dedicated fleets, more capabilities in parcel shipping, enhanced trading partner portals, and enhanced event and performance management. The vendors that have been most responsive to these types of changes score highly in this category.

Although it's not crucial, marketing execution is an important element of the overall evaluation process. Visibility is moderately important to success, but the more important consideration is the negative impact on vendor/product viability caused by a lack of visibility.

Customer experience is ranked high because a vendor's ability to use and exploit functionality to drive business value is a critical element of a provider's ability to execute. We look at vendor track records with complex and sophisticated customers, clients' overall satisfaction with products and services, special services vendors offer to assist customers with managing their freight operations and how much TMS experience a vendor has.

Vendor support, maintenance, business and technical consulting, and field operations are important parts of a TMS selection process. Operations looks at a vendor's ability to meet its goals and commitments on an ongoing basis — it's ranked as standard, and there are marked differences in capabilities across vendors, as confirmed by customer references. Factors include the quality of the organizational structure, including skills, experience, programs, systems and other vehicles that enable an organization to operate effectively and efficiently on an ongoing basis.

Market understanding is ranked high. Market understanding assesses the TMS vendors' ability to understand TMS buyers' wants and needs and translate them into products and services. Vendors that show the highest degree of vision listen, anticipate and understand buyers' wants and needs, and can augment them with their own TMS visions.

Vendors' domain expertise, technology vision and vision for the TMS of the future rank highly. From a transportation domain expertise perspective, we look at vendors' knowledge and vision for traditional shippers, as well as LSPs. Although the primary focus of the TMS Magic Quadrant is shippers (companies that buy freight services), a growing market for TMS is LSPs (companies that buy and sell freight services), and we rated the vendors' vision and their ability to support both markets.

Marketing and sales strategy are ranked low and standard, respectively, because these criteria have minimal impact on the TMS market. Although important, marketing strategy is not differentiated across vendors. Sales strategy is also minimally differentiated, except for indirect sales channels, which are emerging to address the lower end of the TMS market.

Offering (product) strategy is rated high. This refers to a technology provider's approach to product development and delivery that emphasizes differentiation, functionality, technology, methodology and feature set, as they map to current and future TMS requirements. Like all application industries, the TMS market will be dramatically affected by SOAs and the emergence of BPPs. In addition, the vendors' strategies for building end-to-end processes (specifically the convergence of WMSs); other application areas, such as trade compliance; and hazardous material safety with TMS are evaluated as part of product strategy. The vendors' understanding of these market changes and the product strategy for successfully navigating these changes significantly influences vendors' completeness of vision.

Vendors' business models (that is, the soundness and logic of providers' underlying business propositions) and vertical/industry strategies — technology providers' strategies to direct resources, skills and offerings to meet the specific needs of individual market segments, including industry verticals — are ranked as standard. The vertical strategy is an important factor in evaluating where a transportation vendor is going, because transportation processes and user requirements vary across industries. We evaluate the transportation management processes that take into account asset-based, dedicated fleet strategies and support for LSPs, which are growing factors in product strategy and innovation. Likewise, visions and strategies for addressing global logistics and other modes and types of transportation are evaluated.

Innovation is rated high and takes into account vendors' strategies for staying close to the most-creative solutions or complicated problems in the market to drive innovative functionality. In addition, the evaluation of a vendor's overall business strategy for embracing SOA and a BPP business model and coordinating the fit among these disparate product innovation areas is a key factor in this analysis.

Geographic strategy has been rated high this year. This criterion looks at technology providers' strategies for directing resources, skills and offerings to meet the specific needs of global logistics in terms of a multigeography TMS (including multilanguage, multicurrency and geo-coding), and complex multileg international movements. This also assesses vendors' abilities to support global transportation requirements beyond core TMS functionality, such as capabilities or partnerships to address trade compliance and trade document management.

Leaders demonstrate vision and the ability to execute. TMS market leaders have deep and robust functionality that addresses a broad range of user requirements. These vendors have proven products, track records of customer success and demonstrated momentum in growing their market presence. Leading vendors support sophisticated and complex transportation strategies for large customers with substantial freight spending. They also meet the needs of users throughout the transportation process, with offerings from strategic planning and procurement through freight payment and audit functionality.

Leaders have compelling strategies for addressing the ongoing market changes related to the emergence of SOA and BPPs, the integration of dedicated and private fleet assets, the convergence of TMS with other supply chain management functionality and support for global transportation operations. Leaders are extending the reach of TMS beyond traditional shippers to include LSPs adding functionality to address the unique needs of this emerging market, and they're out in front of the evolution of transportation management as an enterprise shared service. Leaders are also furthest in front supporting the transportation needs of multiple geographies and adding capabilities to support the complex needs of multileg global logistics and transportation.

Challengers have a historically strong presence supporting complex transportation requirements, but trail the leaders in certain aspects of technology or business requirements required by the more-advanced users of TMS solutions. For example, a challenger may have strong TMS functional breadth, good planning and robust execution capabilities, but may lack functionality in innovative areas — such as multileg international movements, dedicated tours, TMS/WMS convergence or dedicated/private fleet integration. In addition, some vendors in this quadrant have an incomplete vision for the emergence and exploitation of SOA and the BPP.

Visionary providers have a compelling vision for achieving a leadership position in the market, such as a full SOA/BPP strategy or comprehensive global transportation management solutions, but lack certain characteristics in their ability to execute.

Niche players are often functionally adequate for many users, but lack the full depth, breadth or robustness of functionality demanded by the most complex and sophisticated users, and they might not have a broad vision for next-generation TMS. These vendors often lack the experience, numbers of clients, customer references or business viability of the leading vendors in the market. This is not to say that niche vendors are not viable, or preferable, for many TMS buyers. In some cases, such as North American only, smaller shippers, or companies with minimal complexity or sophistication, these vendors could be the best choice.

In July 2006, HighJump, which is headquartered in Eden Prairie, Minnesota, and is a subsidiary of 3M, acquired Pinnacle Distribution Concepts, which is based in Knoxville, Tennessee. This added a TMS provider to its supply chain execution (SCE) portfolio. HighJump can offer a single-instance–per-customer, hosted TMS solution that covers the core TMS functions of planning, execution and settlement. HighJump's acquisition improves its TMS product viability and offers HighJump customers with moderate TMS requirements a single solution.
HighJump has approximately 45 TMS clients, having added about a half dozen since the Pinnacle acquisition. It addresses moderate TMS requirements for North America-only customers, although the vendor has plans to move to other geographic locations during the next two years.
HighJump's strong suit is low TCO for small-to-midsize shippers with moderate complexity. The vendor offers a variety of pricing approaches that can be tailored to clients' needs.
With its acquisition of Global Beverage Group (GBG) in September 2006, HighJump added delivery management solutions targeted at direct-store-delivery businesses. However, these capabilities are not integrated with TMS — they support last-mile delivery for private fleets in route sales environments, such as beverages and snack foods.
HighJump has not articulated a clear strategy to combine GBG's capabilities with its core TMS and WMS solutions; however, such a move would enable HighJump to do some unique things in direct store delivery businesses. Nonetheless, given the stand-alone nature of each of these products, it will take several years to develop an integrated solution on a common technical foundation.

Although the vendor is appropriate for users with moderate complexity, HighJump/Pinnacle lacks the overall breadth, depth and geographical scope of the leading TMS solutions. The Pinnacle acquisition gives HighJump a more functionally proven application than what it was trying to build in-house; however, on its own, Pinnacle's offering was not a market leader in terms of functionality or vision. This is why Gartner considers HighJump a niche vendor.
Although HighJump's core TMS functionality addresses the fundamental needs of domestic, North American users, the technology (single-instance-per-customer, hosted TMS) and the user interface are weak, trailing the leading TMS solutions.
A hosted, single-instance TMS does not afford HighJump users some of the same benefits of a true SaaS TMS, such as broadcast tendering, but this could benefit HighJump in the long term because it could be easier to migrate to an on-premise model integrated with its WMS and other SCE solutions.

With more than 226 TMS customers, i2, which is headquartered in Dallas, Texas, continues to offer a highly differentiated solution that provides the breadth, depth and adaptability demanded by complex and sophisticated TMS users. Planning and optimization are i2's core competencies, and its TMS has one of the most-sophisticated planning engines, used by sophisticated organizations that have the most-complex planning requirements.
Strong with complex domestic optimization, it is even further ahead when organizations need to optimize multileg international shipments, where i2 supports dynamic optimized routing vs. the more-typical, itinerary-based approaches of many other TMSs. In addition, i2's product innovation continues — it has enhanced its support for asset-based optimization, including driver, tractor and trailer; global logistics capabilities; transportation analytics/performance management; and tactical/strategic transportation planning.
i2's continued investment in SOA technology, which it calls the Agile Business Process Platform, is helping the company leverage its SCM/TMS domain expertise, core TMS application and SOA-centric platform to enable it to create unique and differentiated solutions through custom workflows and process orchestration, instead of lower-level code.
i2 has announced a new approach to delivering innovative solutions through what it calls the Business Content Library (BCL). This will be a repository of the innovative solutions it has developed, often with specific customers, sourced from a central repository of business process and technology workflows, hosted by i2.
Along with Oracle OTM, i2 has proved to be especially strong in organizations that need to manage transportation as a global, shared service across multiple business units and geographic locations.

Despite i2's attempts to make its TMS easier to use, the complexity of the package, principally caused by the sophistication of the planning engine and its complex user interfaces, is still a weakness. However, although the learning curve of the system is steep, its flexibility and depth of functionality can actually make it easier for power users to master.
i2's financial situation has stabilized; however, issues with management changes and financial performance inconsistency continue to make viability a buyer concern.
Although i2's new BCL approach to delivering innovation is intriguing, it isn't mature. The BCL is a new solution delivery approach, but the commercial model — such as what to charge for a subscription to the BCL, what specific solutions will cost, how support and maintenance of these will be provided, and what this will cost — is unclear and poorly defined.

Infor, headquartered in Atlanta, Georgia, continues to invest in building a credible TMS offering, after having inherited some good transportation components with its acquisitions of Baan/Caps Logistics, SSA/Arzoon and, most recently, with ShipLogix.
By integrating the SaaS-based execution functionality from Arzoon, which was sub-par in planning, with robust planning engines from Caps Logistics, Infor now has a more credible and competitive TMS; however, it is not market-leading in terms of TMS breadth, depth and future geographical support.
Infor's acquisition of ShipLogix added a seemingly competitive offering to its TMS. This provides Infor with a more appropriate TMS solution for most of its manufacturing, distribution, LSP and retail customers, which are small and midsize businesses (SMBs). This will provide a more-viable TMS for SMBs, even beyond Infor's customer base.
Infor offers multiple pricing options, starting with an entry point significantly below most TMS providers. This will make the Infor TMS solutions competitive from a TCO perspective.

Few customers use the combined offering, although far more customers use some of the individual components, such as the Infor SCM Transportation Planning (formerly called CAPS Transpro) solution or the Infor SCM Route Planning (formerly called CAPS RoutePro) solution. However, most of these are older installations.
Infor has an overlapping portfolio of logistics capabilities that spans multiple warehousing and multiple transportation solutions, causing buyer confusion.
Infor has not yet demonstrated how its multiple ERP systems and SCM offerings supply chain planning (SCP), WMS and TMS — will fit together and how it will align its SCM and industry strategies. Users considering Infor TMS offerings should pay particular attention to technology and integration issues, because they are not consistent across all Infor offerings.
Infor has had minimal traction in the TMS market; however, it has two distinct products that are designed to satisfy the significantly different requirements of the high-end and SMB TMS markets. SMB shippers and third-party logistics (3PL) users are most likely to be safe with the Infor SCM Transportation Management ShipLogix solution, but users with more-complex needs should be cautious about selecting Infor.
Early versions are principally domestic (North America), although the vendor has strategies to expand its global capabilities and sales.
Infor has good financial flexibility; however, it carries a proportionately higher level of debt ($4.5 billion), compared with its largest competitors (for example, SAP, Oracle and Microsoft). Gartner believes that, in the current financial market, this may limit Infor's strategic flexibility compared with these major vendors.

Headquartered in Scottsdale, Arizona, JDA has acquired all of Manugistics' assets, including its TMS products. JDA has one of the most mature — although, until recently, somewhat dated — TMS offerings in the market. It addresses most of the needs of complex users domestically and internationally.
With 128 TMS customers, JDA's Transportation and Logistics Management solution offers strong planning and execution functionality, as well as good freight procurement, collaboration, freight analytics and strategic planning functionality.
Manugistics offers independent solutions for contract and owned fleets, which helps the company penetrate retailers; however, until recently, they were integrated, and further investment is planned to exploit asset-based planning and execution.
JDA is bringing its independent solutions closer together for enterprises that need to manage carriers and dedicated/private fleets in one system's contract. In addition, JDA has improved its support for global logistics, adding more support for global operations and transportation functions, such as multimodal, multileg moves and vessel scheduling.
Combined with JDA's market focus and other solutions, its Transportation and Logistics Management solutions are best suited to users in the consumer goods and retail industries, and a large percentage of its clients are in these markets.

Before the acquisition, Manugistics had let its TMS languish and had not invested in new sales, marketing or product development, which combined to erode its position in the TMS market. Although Manugistics had underinvested in TMS, customers confirm that JDA has reversed this trend, adding new features and functions and upgrading the legacy technical architecture. However, JDA is still playing "catch up" with several TMS vendors.
Although JDA's investments show promise, and JDA is improving its core TMS functionality, Gartner still does not see a differentiated or compelling long-term TMS vision from JDA.
Although it continues to upgrade its technical architecture, JDA does not have a clear strategy for how it will support rapid innovation, leveraging SOA and a BPP application management strategy.
JDA has not articulated a definitive strategy for how it plans to exploit its large installed base, which, if done quickly, could "kick start" its recently sluggish sales.

LeanLogistics, headquartered in Holland, Michigan, offers a robust and stable SaaS TMS that addresses most of the basic, core TMS requirements of North American shippers and LSPs. The vendor has 40 TMS customers, 4,000 carriers and 2,000 suppliers on its SaaS network. Although it's the smallest vendor in 2007's TMS Magic Quadrant, LeanLogistics operates profitably and, for its size, has several impressive customers.
The vendor offers an ample SaaS TMS that addresses the core North American TMS functions of planning, execution, collaboration and settlement. For many users, one of the principal benefits of Lean's SaaS TMS is its network-centricity and digital carrier connectivity, which it addresses completely by handling these relationships directly, if necessary.
LeanLogistics exploits the data it captures through the management of a SaaS TMS to help shippers perform such operations as benchmarking their activities against other parties on the network.
Although LeanLogistics offers a good (albeit undifferentiated) SaaS TMS, this is not where the company will gain its competitive advantage. LeanLogistics is pursuing what Gartner calls a TMS managed services strategy, for which it offers a portfolio of services over and above traditional implementation services. This can extend from running an annual/periodic freight sourcing/buy to staffing and managing day-to-day freight operations.
Customer satisfaction is high, and customers reference the vendor's transportation domain expertise, strong grasp of transportation industry trends and real-world experience as the principal reasons they continue to work with LeanLogistics.

LeanLogistics runs a tight financial ship, but its size causes buyer viability concerns, and it remains a possible takeover target. However, given the quality of its solutions, an acquiring company is likely to keep its product going.
From a TMS product perspective, LeanLogistics lacks the overall breath, depth and geographical scope of the leading TMS solutions. However, this has not proved to be an issue for typical LeanLogistics customers, which are North American companies that emphasize the services LeanLogistics offers over and above implementation and the competitive TCO of its TMS.
LeanLogistics is expected to remain a domestic, North American solution provider, which limits it to North American users.
Most of the other vendors in this space are positioned to begin offering at least a WMS/TMS combination (if not a larger SCE convergence strategy); however, LeanLogistics isn't aligned with any other supply chain offerings.
The vendor has not communicated plans to deliver components that enable a BPP strategy with its customers.

Headquartered in Atlanta, Georgia, Logility is not as visible as some of the vendors in the TMS market; however, it has one of the most-mature TMS solutions, and it continues to make notable progress with its TMS offering. Logility's execution, rating and settlement capabilities have long been competitive, and during the past several years, it has filled many functional gaps between itself and market-leading vendors in terms of core domestic, North American, transportation planning, execution and settlement.
Operational planning functionality has been a core investment area and is now on a par with the TMS leaders. Logility continues to grow its customer base of 150 users, having added 19 customers during 2007. Its growth has mainly involved less-complex, midmarket North American deals, where its TMS is well-positioned.
Although smaller than most of the SCM suite vendors in this Magic Quadrant, Logility's financial performance has been consistently positive during the past two years, making viability less an issue. The closely held company structure has made Logility somewhat impervious to concerns about return on investment that might normally affect such a small vendor.
One of the vendor's functional strengths is its multimodal rating engine, coupled with its offering of industry databases covering tariffs, transit times, service guides, rail routes and parcel rates. Several customers, including some carriers and 3PLs that require the buy- and sell-side rating Logility provides, use this capability independent of the rest of the TMS.
Users validate product maturity and customer satisfaction as key vendor strengths.

Logility's functional progress has been noteworthy; however, this effort largely brings parity to its core TMS product, rather than market-leading functionality.
Logility's TMS is a good midmarket solution covering the core TMS functions of planning, execution and settlement, but it is principally a domestic, North America-only solution, and the vendor has not articulated definitive strategies to focus on global logistics and broad international deployments.
Although it supports core planning and some execution capabilities (using them in mode and carrier selection), Logility does not offer full support for asset/fleet-based planning and execution, ocean booking or parcel manifesting.
The vendor has not demonstrated sales momentum, nor has it positioned itself to compete in the most-competitive and complex deals. Logility has a reasonable — but not differentiated or market-leading — strategy for addressing process consolidation between its own or other vendors' WMSs and TMSs and for BPP strategies in the market.

Manhattan, headquartered in Atlanta, Georgia, continues to invest heavily in the TMS it acquired from Logistics.com in 2002. The company offers a credible TMS, and some impressive clients validate that the system is capable of handling many of the needs of users with complex requirements.
Manhattan's TMS is approaching market-leading capabilities in operational planning, execution, and audit and payment functionality, while its freight procurement already leads the industry. The vendor has also demonstrated strong capabilities in fleet management.
One of Logistics.com's roots was solutions specifically designed for truckload and less-than-truckload carriers, and Manhattan is exploiting this unique expertise to deliver differentiated solutions for asset-based planning and execution for companies that operate private or dedicated fleets, in addition to using contract carriers. Although this is a separate solution portfolio, Manhattan remains a strong player on the carrier side, and, although it lost some visibility in this space after the acquisition, demand in this sector is up, as are the vendor's new deals.
Manhattan is one of the few vendors to offer on-premise and SaaS deployment options, and it's also one of a small number of TMS providers that offers a complete parcel-manifesting system as part of its portfolio.
Manhattan has a BPP strategy and a product line that spans planning and execution. This will enable it to be a significant player across SCM markets, and the vendor has a strategy for building out process-based consolidation, as well as data-based integration, of its WMS, yard management system and TMS products, which will become significant differentiators in the market.
Given Manhattan's broad SCM portfolio, it is well-positioned to exploit what Gartner refers to as SCE convergence, but, although the vendor has some nascent examples (such as dock scheduling), it has not broadly executed on the SCE convergence vision. When the vendor integrates its TMS with its new Flow products, Manhattan could provide some innovative approaches in such areas as dynamic pool point routing and dynamic rerouting of international inbound shipments.

Manhattan has not built momentum in the TMS market by quickly growing its client base and referenceability. So far, it is not consistently visible in new deals outside its WMS customer base. The vendor has now increased investment in marketing and sales and has brought on new, experienced TMS leadership to drive its TMS go-to-market strategies, which should improve this situation.
Although its comprehensive TMS installed base is small, it has sold point solutions, such as freight procurement, to a larger number of customers. Manhattan customers are happy, and many extol the virtues of the relationship they have with Manhattan; however, as the vendor grows its TMS sales, it will be a challenge to maintain a high-touch relationship with customers.
Although product breadth and depth have improved in its core TMS areas, and the vendor continues to add new functionality, it is not yet complete enough for Manhattan to be a dominant force in the TMS market, although it's close. Some functional areas, such as strategic and tactical planning, need to be addressed, and the vendor needs to have live examples of customers exploiting SCE convergence beyond simple things, such as dock scheduling.
Because its product has been an SaaS offering since its emergence as Logistics.com, the administrative and training tools for the on-premise deployment model still need polishing.
Manhattan's SCE convergence strategy remains complicated, because, although Manhattan is working toward a single architectural platform across all its open-system products (notably WMS and its other SCM products, including TMS), it's not fully there. It will also continue to have some solutions that are not on the open-system platform, such as its iSeries and .NET WMSs.

Headquartered in Redwood Shores, California, Oracle offers the stability of a financially strong and global ERP vendor, along with a best-of-breed TMS, which it acquired from G-Log in 2005. The TMS is a functionally broad, deep and robust TMS that is targeted at complex transportation requirements for sophisticated organizations.
OTM balances deep functionality with ease of use, which appeals to a broad array of customers. Oracle is taking advantage of this, expanding its TMS market with its typical sophisticated shipper and LSP customers, as well as down-market to smaller shippers. Internationally, the company is leveraging its global sales presence.
OTM provides credible and powerful capabilities across the TMS functional spectrum, with notable depth of functionality in international logistics projects for which global visibility is important.
OTM is particularly important for companies looking to support transportation as a shared service. OTM supports situations in which multiple business entities — such as individual companies in a 3PL/LSP environment or business units in multidivisional organizations — across multiple geographies are looking to consolidate onto a common TMS platform, where planning, execution and the resultant efficiencies are shared across operations.
Oracle has momentum with OTM, adding new clients ahead of market averages, and it has expanded its marketing and sales presence domestically and internationally, while improving product quality, expanding consulting resources and continuing to add significant new functionality.
G-Log was a formidable competitor in the TMS market and was present in most of the largest TMS deals — Oracle has proved it can maintain this position, having won several large deals in 2007.
In addition to OTM, Oracle's JD Edwards EnterpriseOne product line has basic native TMS execution and settlement functionality as an alternative option for EnterpriseOne customers that require transportation execution capabilities only. EnterpriseOne users that require more-advanced planning are likely to favor OTM, even though it isn't natively integrated with EnterpriseOne.

When Oracle purchased G-Log, some users were concerned whether Oracle would be able to maintain the pace and intensity of development of the TMS product; maintain the domain expertise in sales, consulting and development; and sell and support a sophisticated, best-of-breed TMS to demanding customers. This is no longer an issue — Oracle has retained much of the G-Log staff, and customers are happy with support and the continued pace of development.
A gap in OTM is planning functionality, depth and scalability, where it trails i2's TMS product. (However, this is typically a "deal breaker" only for a few large and sophisticated shippers and 3PL companies.)
Although, by being independent, OTM functions like a best-of-breed solution under the umbrella of a stable ERP vendor, it isn't as seamlessly integrated with Oracle E-Business Suite (EBS) and Oracle's other ERPs (such as EnterpriseOne) as are other ERP/TMS solutions. This is because, even though Oracle is offering Applications Integration Architecture (AIA) for OTM scenarios, OTM has not been consolidated with Oracle EBS, although it has been integrated at a process-based data exchange level.
Via acquisition, Oracle has collected many SCM applications, including TMS and SCP. These products are independently well-designed for the most part, but they lack a common technology architecture, which will hamper Oracle's ability to exploit SCE convergence. SCE convergence involves the breakdown of functional silos (such as WMS, TMS and SCP), enabling business processes to span and optimize traditional SCE functional domains — for example, planning transportation and warehousing activities at the same time or integrating TMS with robust dock scheduling.
OTM will be a central component of Oracle Fusion Applications, but it won't be a consolidated product with Oracle EBS. Oracle will continue to use AIA technology to integrate, because consolidation has not been robustly pursued.

In September 2006, QAD acquired Precision Software, which is headquartered in Dublin, Ireland (with its U.S. headquarters in Chicago, Illinois). This improves QAD's vendor viability and provides QAD's several thousand manufacturing customers with access to credible TMS, parcel-manifesting and trade-compliance applications.
Although Precision has only recently offered a holistic multimodal TMS with improved planning, it has strengths in global logistics, global trade compliance, and multicarrier parcel manifesting and shipping.
Precision has 450 customers, most of which are outside North America, and it has 50 customers using earlier versions of its TMS. Although Precision's planning and optimization is nascent, compared with the TMS market leaders, with only a small number of clients, its TMS now covers the basic requirements of transportation planning and execution.
Global logistics — combining transportation, global visibility and trade compliance — continues to be a core strength. Precision is the only vendor other than SAP offering its own integrated trade compliance solution, which is becoming increasingly important for global shippers that need to support a variety of documents required to execute international shipments.
Version 7.0, which came out in mid-2007, enhances Precision's planning and optimization engine, improving supply chain inventory visibility and creating a parcel-shipping solution for nonproduction environments, such as banks or insurance companies.
Although this evaluation does not cover stand-alone parcel-manifesting applications, Precision's strength in this area has proved to be a differentiator for shippers, such e-retailers, that have large volumes of parcel shipments, combined with other modes.

Precision's TMS planning and optimization is nascent, and few customers use its enhanced planning and optimization capabilities. Hence, new customers that need advanced transportation planning should rigorously test this capability during evaluations.
QAD has the potential to bring Precision into more deals than in the past. Although it's growing its staff, there could be capacity constraints if QAD closes more deals than Precision is accustomed to handling. Precision's TMS can compete up-market with larger shippers; however, the bulk of QAD's customers are SMBs, and Precision may be too rich for many of these enterprises.
Although it has improved its planning, Precision's products are not yet as broad or as deep as those offered by the TMS leaders; however, this will matter only to large, complex users.
Precision's problem is the opposite of most TMS vendors — its strengths and the bulk of its customers are outside North America, as are most of its technical resources. Although it has increased its head count in North America since the QAD acquisition, and it remains strong in Europe, Precision does not have much of a presence outside these international markets, although QAD does.

Headquartered in Milwaukee, Wisconsin, RedPrairie continues to expand the scope of its TMS offerings, most notably by adding a holistic, although independent, asset/fleet-based planning and execution application with its acquisition of GeocomTMS in March 2007.
The vendor has 75 customers for its core, multimodal TMS product, which covers the primary functions of planning, execution and settlement. This product addresses relatively complex user requirements, with references and proven functionality. In addition, 45 customers use the vendor's asset-based fleet management application.
Although traditionally a domestic, North American-focused TMS, the vendor has recently had some success selling in Europe. This effort has included expanding the scope of the vendor's core TMS to include such capabilities as European geography, multiple units of measure, multiple currencies, special European transportation considerations and a few language translations, with plans for the addition of other languages.
RedPrairie is differentiated in that it offers competitive solutions in three transportation domains: multimodal planning, execution and settlement; asset-based, private/dedicated fleet management; and multicarrier parcel manifesting. Its independent (although integrated) solutions are not as clean as those that were originally built on a single, common technology platform; however, RedPrairie is one of the few vendors with credible solutions in all three shipping domains.
During the past several years, the vendor has re-architected its core TMS, using an SOA written in Java that shares a data model/schema with the vendor's discrete WMS and with a much-improved, Web-based user interface that provides a differentiated look, feel and usability. In addition, the vendor has been building out a set of "Coplex" algorithms that enable continuous optimization and more-advanced optimization strategies.
With the breadth of RedPrairie's SCE portfolio, especially in consumer goods, retail and LSPs, the vendor is well-situated to exploit what Gartner refers to as SCE convergence. Although nascent, the vendor can demonstrate some ability to coordinate processes across TMS and WMS applications.

RedPrairie has not established a market-leading, functional go-to-market position or marketing vision within the TMS space.
Although a strong domestic solution, RedPrairie's core TMS had not historically been as global as the leading solutions. Recent investments and client wins (specifically in Europe) are expanding the scope of the vendor's TMS, at least for North America and Europe.
The vendor partners with Precision Software for trade compliance, but, with Precision's acquisition by QAD, this partnership could falter, although there are no indications of this. RedPrairie also partners for other TMS components, such as freight procurement (with CombineNet).
During the past several years, the vendor's SCM vision has evolved into addressing end-to-end supply chain requirements, particularly in retail and consumer goods. If this vision is delivered on, RedPrairie will be aligned with Gartner's SCE convergence concept. Although this is noteworthy, thus far, it lacks substance in end-to-end functionality.
RedPrairie offers a variety of independent WMS and TMS products. Given the number of independent products, in the short term, the vendor will rewrite some, but not all products. It's likely to integrate some, but not all products, and it will also wrap the independent solutions with some layered capabilities, such as visibility, event management and analytics to bridge its solutions.
RedPrairie's overarching technology and SOA vision is compelling, and, in TMS, it's competitive. However, overall execution of the vendor's vision will be difficult, because of the number of independent products the company offers and the diversity of solutions in its installed base.
Recent management changes open up questions about the future of RedPrairie's strategy (see "Expect Few Near-Term Changes From New RedPrairie Leadership").
A private equity firm's control of RedPrairie makes an initial public offering or acquisition likely before 2012.

Headquartered in Waldorf, Germany, SAP's TMS core strengths are the size of its ERP installed base of large, sophisticated manufacturing and distribution enterprise systems; its global presence; and its financial viability. Although SAP's TMS capabilities have lagged the leaders, it has a sizable number of customers using some SAP TMS functionality. However, prior to the introduction of SCM 5.0, most of these were devoted SAP customers with minimal TMS requirements, which used only pieces of SAP's TMS functionality, which was split between ERP and SAP's Transportation Planning and Vehicle Scheduling (TPVS) solution.
Even with the TMS functional enhancements in SCM 5.0, SAP still lacks the breadth and depth of leading TMS solutions, particularly in planning and optimization. However, SAP has become a more-viable and competitive TMS offering, which is able to address the core transportation needs of customers that are not highly complex and sophisticated.
SAP's BPP and ecosystem strategies are the market's most robust technology and business strategies for the next significant market change. Its BPP strategy promises users business process agility, and TMS users will be among the first to achieve this, because much of the planned SAP-TM 6.0 work exploits the transition to a BPP strategy within SAP.
Playing off its ecosystem, composite application and BPP strategies, SAP is extending the vision of SCE convergence well beyond most of its competitors. SAP's vision and, in some cases, its current capabilities, reach beyond traditional warehousing and transportation and into such areas as order management, trade compliance, and environmental health and safety. For example, SAP TMS can reference information such as trade compliance data from its Global Trade Services solution or hazardous materials data from its Environmental Health and Safety solution and use these in transportation.

SAP's depth in TMS functionality is uneven — it offers differentiating capabilities, such as deep rail car management and emerging ocean booking and freight forwarding capabilities, which other TMS don't support, but it also offers nondifferentiating functionality in such areas as carrier connectivity/visibility and event management.
SAP has taken a "building block approach" to large chunks of SCM functionality, developing general-purpose components such as its Supply Network Collaboration. These can be used by a TMS, as well as other components; however, they're not as freight-focused as TMS specialist vendor solutions. SAP customers often require more effort to make these function as they want, and they're not always packaged processes, so building out these capabilities, although valuable, isn't easy.
SAP is now moving down a new path (planned for early 2008) called SAP-TM 6.0. This involves rebuilding its TMS offering to combine planning and execution on a common, stand-alone platform that takes advantage of SAP's Enterprise Service Object Architecture (eSOA). SAP-TM 6.0 will support all modes (ocean, air, land and rail) and span execution, planning, settlement, visibility and performance management. Although it will eventually be easier for customers to deploy and manage TMS as a consolidated functionality, and the proposed capabilities of SAP-TM 6.0 appear competitive, this is a dramatic change in direction that could affect SAP's TMS customers.
Few customers are running a comprehensive implementation of SCM 5.0 TMS (TPVS 5.0), and only a few customers are expected to ramp up with SAP-TM 6.0.
The move to SAP TM 6.0 is strategically the right thing for SAP to do to become more competitive in the TMS market; however, it will also cause problems for customers using components of SAP TMS functionality that will have to re-implement, as well as prospective customers that are concerned with product maturity and are considering TMS solutions.
Historically, users have had a difficult time finding qualified transportation sales resources within SAP and implementation resources across SAP and system integrators (SIs). However, prior to ramp-up for SAP-TM 6.0, SAP placed more emphasis on on-boarding and training SIs and internally training its consultants before general availability. As a result, there should be fewer issues with locating resources.

Sterling is headquartered in Dublin, Ohio. With its purchase of Nistevo, it expanded the breadth of its SCM portfolio, adding an execution-centric, SaaS TMS offering that is capable of handling most core transportation requirements. With the acquisition, Sterling eliminated the vendor viability concerns that plagued Nistevo as a small TMS specialist vendor.
Sterling has more than 100 TMS customers, which is the largest number of total customers on a SaaS TMS platform. The vendor also has the largest carrier community on its network, with more than 7,000 carriers and an extensive supplier collaborative community of 30,000 users.
Sterling's strength is supporting clients with modest planning complexity or sophistication that need electronic interaction with a large number of carriers. This is especially the case if the user regularly needs to supplement normal tendering with broadcast tender beyond its preferred carrier list.
Ease of use for shippers and their trading partners and time to value are most often cited as the vendor's key strengths.
Sterling has done a good job selling cross-industry and has a good mix of customers across multiple verticals, company sizes and freight operations. Gartner sees strong TMS market growth potential across verticals, especially at the lower end of the TMS market (users with annual freight spend under $50 million). As a SaaS TMS vendor, given its current pricing model and good TCO, Sterling is well-positioned to take advantage of this market expansion.
Sterling has not yet exploited the combination of TMS and WMS afforded by its acquisitions of Nistevo and Yantra; however, this could be an opportunity for Sterling to address SCE convergence and offer a compelling supply-chain-oriented BPP. Yantra's BPP offering was one of the most-advanced in the market, but it has a completely different architecture from Sterling's TMS, which will be a barrier to pursuing this strategy until the solutions are merged onto a common platform.

Although Sterling's acquisitions have eliminated company viability concerns, TMS and SCM are a small fraction of its business, and they're not the vendor's primary focus overall. Sterling has not demonstrated the ability to consistently and aggressively sell TMS and SCM through its traditional sales force, and, although it now has two good SCM solutions, they're lost in the overall breadth of Sterling's solution footprint.
Sterling's TMS is strong in execution; however, prior to its partnership with Ilog's Transportation Power Ops tool, Sterling was marginal in operational planning. Although credible in the areas it covers, Sterling does not offer as broad a solution as the TMS leaders, and it is a North America-only solution vendor, although it has a strategy to grow internationally, beginning first in Europe.
SaaS revenue growth, including TMS, normally has a significantly flatter trajectory than licensed products, so, as a TMS SaaS product vendor, Sterling must aggressively add new customers to grow and to keep its TMS viable, which is not yet happening. One option would be to raise prices and go after larger deals, which moves the vendor away from its most differentiated position in the TMS market, notably midmarket shippers.
Sterling is functionally well-positioned to pursue SCE convergence, but Sterling's TMS product is an SaaS offering, whereas the Yantra WMS and Comergent Multichannel selling solutions are on-premise applications. Although the vendor has a strategy for integrating these solutions, they do not operate on a common platform, and are likely to move to the on-demand model, as opposed to moving TMS to an on-premise solution.

Although not an industry-leading vendor in terms of breadth, depth and geographical scope, Transplace, headquartered in Plano, Texas, offers a credible SaaS TMS that spans the core TMS functions of planning, execution and settlement. It is particularly strong in analytics and performance management and has 35 customers across multiple industries, although few use its entire TMS capabilities, and some only use small pieces, such as broadcast tendering.
Transplace's position as a transportation-managed service provider is notable.
The vendor's TMS is sufficient for moderately complex and sophisticated users, but it is not differentiated from the TMS leaders, particularly in planning and optimization and global logistics.
As a transportation managed service provider, Transplace wins high marks from customers for its domain expertise, freight process methodologies and its broad portfolio of services, including freight bid/procurement, process consulting, engineering, managed services and brokerage operations, which it offers beyond basic software implementation and support.
Transplace's customers are happy, and they consistently find the vendor's services to be the primary source of their satisfaction — several said that it was the services, rather than just the software, that helped them achieve their performance goals.

Transplace has few holistic TMS clients, and it doesn't look to compete in TMS software-only deals, although there's no obvious functional reason why it couldn't. The vendor sees its competitive advantage as a managed service provider that's ready, willing and able to provide services that most TMS software, SaaS or on-premise vendors avoid.
With nearly 600 employees, it needs high-service-mix deals to keep these people busy and generating revenue, so it will continue to gravitate toward higher service deals.
Transplace's TMS supports only domestic, North American transportation requirements; however, it partners with LOG-NET for international shipping portal, visibility, performance gates and alerting, and IES for international transaction processing and platform management.

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