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IDC recommends warranty analytics software, ranks vendors

SAS is the clear leader in the warranty analytics market, with SAP and Teradata at comparable market shares and scrappy players like PTC nipping at their heels.

Noting a “dramatic uptick in interest” in warranty management and warranty analytics software, IDC Manufacturing Insights has ranked nine warranty analytics vendors, naming SAS the clear leader in market share, strategy, and capabilities, and SAP and Teradata as major players.

Warranty analytics software can improve visibility into product quality and warranty performance and simplify information gathering, according to Sheila Brennan, program manager for aftermarket and service strategies at IDC Manufacturing Insights and author of the report.

“The first thing we would expect a warranty analytics tool would be able to do is aggregate data from a number of different sources,” Brennan said. Warranty claims, service incident reports, and financial analyses “might be early indicators of things going wrong with a product,” she said.

Warranty analytics can also provide root cause analysis of why certain products have higher warranty costs, Brennan said. Some tools help identify suspect or fraudulent claims. “What the market is now looking for is more predictive,” Brennan said, “to really give manufacturers the advance notice to act.”

Ideally, manufacturers will be able to use warranty analytics and warranty management software to redesign products for greater reliability and lower service costs, but Brennan said few manufacturers have reached that stage. Some warranty analytics vendors, however, have customers who use the software as an early warning system for warranty problems, she said.

“We always have the question: ‘How early is early enough?’ What does early really mean? Analytics is a wonderful tool for reporting and analysis. Oftentimes, that’s enough to give someone early warning if it’s done in real time,” Brennan said.

The warranty analytics ranking is a follow-up to the warranty management maturity model that IDC developed last year to help manufacturers measure their warranty performance. “They’re all kind of grasping for ways to measure themselves,” Brennan said. Besides rating key vendors, the new report provides a methodology for evaluating warranty analytics products.

Warranty analytics vendors compared

IDC measured warranty analytics vendors on two axes -- strategies and capabilities – then plotted their relative strengths on a “marketscape” diagram. Brennan declined to give specifics on vendors, but the strategy rating considers how a vendor’s strategy aligns with customer requirements over the next three to five years. On the capabilities axis, IDC looked at how well a vendor met customers’ technical and business needs. IDC also surveyed buyers and interviewed users, mostly polling discrete manufacturers, Brennan said, since they are more likely than process manufacturers to have products under warranty.

When rating vendors, IDC placed a high value on warranty analytics software that helps users find solutions to warranty issues quicker and without having to call IT or the vendor, Brennan said. Predefined dashboards, templates, and plug-and-play user interfaces help further that end.

SAS takes up most of the “leaders” segment with the industry’s biggest market share, slightly besting the market shares of SAP and Teradata, both of which make the “major players” category. Parametric Technology Corp. (PTC) and We Predict straddle both segments, but with market shares a fraction of the others’ sizes. Other major players -- with similarly small market shares -- are Camstar, Infernotions, and Pegasystems, with Ubiquiti just crossing over from the “contenders” segment. 

Brennan said the vendors usually differentiate themselves by specialty, such as providing warranty analytics for specific industries. Some products work in third-party business intelligence (BI) platforms, while others stand on their own.

A few warranty analytics software products also handle warranty transactions, such as communications and billing with customers and third-party service providers, she said. However, transactional warranty management software is often a precursor to warranty analytics and provides much of the data needed for analysis, Brennan wrote in the report.

Manufacturers will tend to favor one type over another once they have a firm grasp on their warranty management needs, she said. For example, companies that have invested in a BI tool might look first at compatible warranty analytics software, while those with highly engineered products might need end-to-end warranty management that is integrated with product development software.

Brennan said IDC believes warranty-specific analytics tools are a better bet than generic BI platforms that have been customized for warranty management, and usually provide “greater functionality, better value, and faster return on investment (ROI),” she wrote in the report.

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