About two weeks ago we published the first-ever analysis of warranty analytic vendors and their offerings, wrapping up 7 months of in-depth research that included interviews with almost two dozen manufacturers. Through the IDC MarketScape software vendor assessment methodology, we are able to present an evaluation of the capabilities and strategies of the nine key vendors in the warranty analytic software market, and provide essential guidance to IT buyers.
IDC Manufacturing Insights has seen a dramatic uptick in interest in warranty management and warranty analytics software among manufacturers as the need to reduce costs, improve quality, and retain customers becomes paramount in the uncertain economy. Manufacturers must have better information to evaluate these systems in the context of their diverse industries, strategic goals, business challenges, and IT infrastructures lest they risk tarnishing brand image and losing market share. However, as more warranty software vendors enter into the market, OEMs and brand owners face increased difficulty in sorting through the maze of warranty analytics offerings.
In our research we found that certain capabilities of a warranty analytic application are standard, such as the ability to aggregate disparate data from a variety of independent sources, apply statistical models and algorithms to predict emerging issues, and provide actionable reports to the user. The lack of agreement on the part of both vendors and manufacturers on things like the definition of "early warning," or, the "right" window for prediction in predictive analytics, however, were what made the research most interesting.
Warranty analytics can be viewed as the cornerstone for insight and decision making in a maturing warranty organization (see WCMM Blog and Warranty Management Capabilities Maturity Model, IDC Manufacturing Insights #MI227896). Sharp growth in the industry over the past year is an indication that many organizations have reached a state of readiness or maturity to utilize warranty applications. At the same time, it may be that some investments may have been made prematurely, and organizations will need to backtrack to build the foundations needed to fully leverage their IT investments.
It turns out that the key criteria that contribute to the ability to successfully adopt and derive business value from a warranty analytic application include:
- A software provider's deep knowledge of challenges associated with the warranty process, backed up by credible use cases and proof points of tangible benefits delivered, and further, the ability of a software provider to align with industry practices and the buying organization's business processes
- The application's availability of user value acceleration tools for predictive early warning, suspect claims, and expedited root cause analysis, and specific features that include predefined report templates and customization capabilities
- Buyer organization maturity and readiness to both adequately supply a warranty analytics tool with robust multidisciplinary data to derive intended usefulness, and take action with the results.
Is your organization ready to reap the benefits of warranty analytics, and do you know which software provider to align with? How "early" is early enough for your warning? We want to hear from our community! To view the full report: IDC MarketScape: Warranty Analytics 2012 Vendor Assessment, click here (subscribers only).