Gartner's Strategic Sourcing Magic Quadrant: We Report, You Read and We All Decide
I usually have a more op/ed than reporting take on analyzing the news, but I thought I'd use this post to highlight some of the findings of Gartner's latest Strategic Sourcing Magic Quadrant, authored by Debbie Wilson, to kick off the inevitable commentary on the subject before offering up some more personal observations. Fortunately, this time around, everyone will be available to discuss the topic on equal footing, courtesy of Spend Matters sponsor BravoSolution, which has made the report available for free via this link. The first news to report about the quadrant is who did well: Ariba, BravoSolution, Emptoris, and SAP all made it into the winner's quadrant (i.e., upper right). As for who did not, many of the familiar names in the sector are either in other quadrants or did not make any quadrant at all.
The two providers that stand out most for relative placement/lack of placement, respectively, are our favorite ERP giants, SAP and Oracle. Oracle is noticeably absent from the quadrant (but had previously finished high in Debbie's last evaluation). Sources close to Gartner suggested to me that Oracle was unable to provide strong enough references in key areas, but I've not confirmed this. Regardless, I find it surprising that Oracle would completely fall off the map between rankings, having been highly ranked previously. SAP is noticeably in a strong position, and is positioned as having the strongest vision (Ariba, in contrast, has the strongest ability to execute). I find it ironic that Gartner lists an ERP provider as most visionary, and a best-of-breed provider as having the best ability to execute, but I suppose stranger things have happened (and SAP does have strong vision at the moment in the spend visibility and supply risk arena). Perhaps the relative placements of Ariba, SAP, and Oracle do, to some degree, tie back to the specific research process this time around.
As I previously wrote about this effort, the research process seemed rushed to many who participated. I spoke to a number of vendors who found the compressed timetable for recruiting references and filling in Gartner's information request overly challenging (although at least one provider did post a comment suggesting the timeframe was sufficient). What's more important is that Gartner called this a "strategic sourcing" quadrant, but in fact lumped together disparate areas including spend visibility/analysis, "supply base management" and contract management. From an aggregate-ranking perspective I think it's a bit atypical to consider these areas under the same banner -- especially considering that customers usually evaluate these areas separately -- but I'll leave that for you to debate and decide after reading the report. Moreover, who is buying "supply base management" at the moment? Memo to analysts: stick with conventional phrases like "supplier management" or "supplier information management" vs. trying to get too fancy with new naming conventions .
In my view, these types of vendor comparisons will always invite criticism -- some more than others; it's one reason I've avoided similar undertakings on Spend Matters. I think those in the best position to get an inside yet objective perspective on the report are AMR Research clients (AMR is now part of Gartner but offers a different research subscription). If you're an AMR client, set up an inquiry call with Mickey North Rizza, who is not an author of the report. Ask her which providers she recommends in the areas examined by Gartner's MQ, then see if her responses match Debbie's recommendation and overall findings. Better yet, set up a back-to-back call with Debbie and Mickey and compare notes -- that will give you the best basis for comparison.
As a service to Spend Matters readers, later in March I'll provide my own shortlist for each of the areas Debbie considered in her analysis. I hope theses lists will provide a more complete picture of the kinds of providers available for companies looking at sourcing, supplier information management, spend analysis and contract management collectively (or independently, for that matter, if you're willing to consider best-of-breed approaches).
In the meantime, what do you think about the Quadrant process and Gartner's findings? Is this a useful exercise for vendor shortlisting/selection or not? And more important, as procurement organizations, do you put much stock in these types of analyses in general, or do you see them more as fodder for IT to parade their top choices out? Let's get the conversation started.
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Among vendors, the debate always rages about how such a complex set of information can get distilled down to a subjective dot on a 2x2 matrix. Back when I was a consultant, I learned all about 2 x 2 matrices and how useful they were to convey simply a very complex comparison. Weeks of interviews, complex calculations on mega-spreadsheets, and many late nights plotting data would go into a client study. However, when the consulting partner had only 45 minutes to present to the client’s CEO, all that work got distilled into a 2x2. Why? Because most people’s minds are wired for pictures. One can always go back and read the detail if needed.
The more important question of practitioners who read this blog should be how to use this information to make better technology decisions. Should a company make a technology decision based solely on one analyst report? Obviously not. However, do analyst vendor rankings provide useful information to consider? Of course. A company considering a major technology investment should use reports like this as part of a toolkit in their selection process. There are many points to consider such as
1. What has the trend been among vendors over time within the Magic Quadrant?
2. Is this the first time a vendor has appeared, or has the vendor shown consistent presence and improvement over a period of years?
3. On what basis is the vendor considered a leader – is it based on low price delivery models, superior service execution, unique commodity expertise, or innovative and heavy weight functionality? It is important to understand that there can be many reasons for garnishing the leader status, but rarely do two vendors become a leader for the same reasons.
4. What criteria were used to analyze the competitors? Was it made based on vendor provided information (e.g., a product demo using a crafted script) or was more weighting provided to end user interviews. In some rankings such as those by Gartner, without customer validation, the technology is not given the level of credit a marketer may desire.
5. How has this vendor performed in other analysts evaluations (e.g., The Gartner Magic Quadrant, The Forrester Wave, AMR surveys)? If multiple analysts reach similar conclusions, then companies can feel more secure in the conclusions drawn.
Kevin Potts
VP Product Management & Marketing
Emptoris
http://emptorisinc.blogspot.com/
The best indication of who is "high and to the right" can be drawn from comparing numerous sources and annuals.
I haven't done this myself, but it would be interesting to see the result gathered by cuttting out all the 2x2 matrixes from all (comparative) analysts over the years and plotting the trends by placing them on top of each other.
To answer Jasons final question: are they useful for vendor shortlisting? Definitly yes. Selection? Definitely no.
Good Procurement analysts have Procurement/SCM backgrounds, take pride in their work to incorporate the right vendors, and also do more than rack-stack vendors, but rather help advise their clients to make smart choices and provide intelligence and templates to make the process faster and better - and like others mentioned - not to make the decision for them.
They also measure their words carefully and back them up with facts, which is more than apparently some can say.
You asked: "As procurement organizations, do you put much stock in these types of analyses in general, or do you see them more as fodder for IT to parade their top choices out?"
In my days as a practitioner, I never used analyst reports as anything more than "interesting reading material." For technology selections, there is way too much riding on one's career to not do your own research more thoroughly than some analysts do theirs. I never used a good analyst ranking to influence a selection, whittle down to a short list, or even as the price of admission for RFP consideration.
Plus, it seemed like every vendor touted SOME analyst report that positively mentioned them, making such reports feel like quite the non-differentiator. That being said, sometimes my team used 3rd party research early on to try to identify vendors that we may not have come across on our own.
Having spent a few years actually having worked for some of these analyst firms and then a few years using the reports being churned out by them...I would say that these analyst reports are definitely helpful to many of us who are working under severe time constraints - they help us get up and running quickly. Are they the gospel truth? Certainly not! But very often these reports are the end result of a fair amount of work put in backend to try and figure out the vendors in a particular space by an analyst who has been tracking that space for a number of years. There is definite value to be had in getting an additional 'relatively unbiased' opinion or data point in taking your decision...
The thing to keep in mind while looking at how biased or unbiased these analyst firms are - is to figure out where they make most of their money....some get a majority of their revenues from vendors and will be 'relatively' flexible with their reports...others make a large percentage of their money from end users and it makes sense for them to try and churn out material that is useful to their clients...