How BARC Scores Help Companies to Assess and Classify Business Software Markets
BARC analysts Christian Fuchs and Nina Lorenz offer an introduction to our BARC Score method of software vendor evaluation
The assessment and classification of business software and its suppliers, for example in the software selection process, can often be a complicated task for companies. BARC Scores are designed to demystify this process. They aim to provide a quick and clear overview of a specific market.
With BARC Score, BARC has developed an evaluation method that enables a generic, criteria-based ranking of software vendors as well as products and concepts. The primary goal is to accurately position market competitors and their offerings in the respective market segment examined by BARC’s analysts.
To create a full picture, BARC Scores combine detailed analyst knowledge and extensive survey and market research results from BARC research (including customer feedback on products) and offer a concise, well-founded view of a vendor’s current market position and portfolio. Here, BARC draws on the world’s largest surveys of BI, analytics and planning tools users, ‘The BI & Analytics Survey’ and ‘The Planning Survey’. Both surveys ask companies all over the world annually about their satisfaction with BI, analytics and planning software vendors, products and support services.
The vendors included in the BARC Scores must fulfil a set of criteria based on software revenue, geographical presence and technical capabilities. This ensures that our analysis is focused on mature vendors with widely used products who are not merely confined to one geographical region or industry and who offer a comprehensive range of functionality.
The criteria for evaluating the vendors
Each vendor is classified along the dimensions of ‘Portfolio Capabilities’ and ‘Market Execution’, each representing an axis on the chart. Behind these two dimensions are detailed sub-criteria weighted by the analyst, which together determine a vendor’s position in the respective BARC Score.
‘Market Execution’ considers a blend of product, sales and marketing strategy as well as certain organizational, financial and geographical considerations. An important criterion is the customer satisfaction with a vendor and product from a user point of view.
‘Portfolio Capabilities’ includes a series of weighted sub-criteria based on functional and technological capabilities, as well as the overall architecture and ease of use of a product (portfolio).
With these two dimensions, BARC Scores present an assessment of a vendor’s current market position and execution (y-axis) and the strength of performance and integration of its product portfolio (x-axis) in the respective market segment.
The segments in the BARC Score
Depending on their overall score on each of the axes, vendors are placed in one of five segments.
‘Dominators’ (in the upper right corner of the chart) are vendors that drive both technology and market adoption in a highly influential manner. They have market-leading products, strong brands, maintain a dense partner network and alliances, and are very well positioned financially. They are considered a contender in virtually every planned implementation.
‘Market Leaders’ are well established vendors that drive strong market adoption, supported by technology innovation and strategic acquisitions and by leveraging robust account management and a solid track record. The pairing of powerful technology and with strong sales strategies earns them market success.
‘Challengers’ usually pursue a strong expansion strategy – either through acquisitions or through innovative, perhaps even disruptive technologies, ideas or business models. However, they are limited in terms of sales and marketing.
‘Specialists’ are providers with a product focus on selected market segments. Being a specialist means that they can usually score points with customers through selected features and functions.
‘Entrants’ appear in the lower left corner of the chart. They are relatively new to the market and have yet to make a big impact. Entrants still need to expand their product portfolio, or they still have a small presence in the market.
Coming soon: BARC Scores on the Integrated Planning & Analytics and Financial Performance Management markets
Stay tuned for our upcoming blogs about the latest BARC Scores focusing on ‘Integrated Planning & Analytics (IP&A)’ and ‘Financial Performance Management (FPM)’. These BARC Scores come at a time when many companies recognize that planning, analytics and performance management are more important than ever. Not least due to the worldwide COVID-19 pandemic, the dynamics of markets and competition have increased rapidly and many organizations are struggling to keep pace.
Well-founded decisions based on current forecasts and data analytics, the efficient evaluation of possible future developments in scenarios and simulations as well as the automation of processes are becoming massively more important. FPM plays a crucial role in streamlining financial management processes in companies, monitoring their financial well-being and increasing competitiveness.
Organizations that require comprehensive integration of planning and forecasting, analytics and business intelligence (BI) functionality should look closely to the vendors and products included in the IP&A Score. Companies that want to focus on improving financial performance and are searching for integrated solutions for financial planning, financial consolidation and financial reporting are recommended to consider the FPM Score.
Other posts in this series
Part 1: How BARC Scores Help Companies to Assess and Classify Business Software Markets (this post)
Part 2: A Sneak Peek at the 2021 BARC Score Integrated Planning & Analytics (IP&A)
Part 3: Sneak Preview: The 2021 BARC Score Financial Performance Management (FPM)
Part 4: One Size Fits All? How to Find the Right BARC Score Segment for Your Shortlist – Coming soon!