The Gartner Tragic Quadrant for Strategic Sourcing Application Suites, Part II

As I noted in yesterday’s post, while the Quadrant wasn’t all bad, when you added up all the issues, it was more tragic than magic. And, despite the fact that one of my commenters may be right in the observation that it’s not worth the column-inches I’m going to use discussing it, I can’t let it go. Given the importance assigned to this report by the market space, which is equalled only by the Forrester Grave, I need to make sure you don’t misread any of the statements and base a bad decision on them. So, in this post, I’m going to continue taking the most important issues point by point.

Just Plain Wrong: The unique functionality needed to run reverse auctions is a differentiator between simplistic and enterprise-class strategic sourcing applications.
Correction: in 2001. Not in 2010. I can list over 30 providers of reverse auction solutions off the top of my head (and you can find many of them on the resource site). If it doesn’t have reverse auctions, it’s not a sourcing suite. Period. The real differentiator between simplistic and enterprise is true strategic sourcing decision optimization or an advanced analytics platform.

Crazy Talk: The market is far from mature enough to expect competing solutions to be technically comparable.
Correction: The strategic sourcing process has been well understood, and well documented, by the big consultancies since the early 90s. The core technology has been well documented and well understood since the early 00s. From a technology perspective, every sourcing cycle starts with spend analysis; moves to e-negotiation, which includes RFX, e-Auction, and Optimization (which is used to qualify suppliers, gather bids, and analyze them); and ends with contract (creation and) management. Execution generally includes SRM and Compliance, which tracks data used for supplier selection and evaluation in the next sourcing cycle. The basic requirements have been well documented for years. I even co-authored and edited a book that’s been available on, for two years, that anyone who wants to understand the baseline requirements of these solutions can get their hands on. (They can even get an e-version free through Iasta.) So while some of the newer/advanced features may not be directly comparable, most of the standard features are. (And if they weren’t, how could Gartner even author this paper?)

Out of Left Field: Most of the vendors in this report are privately held, and so we considered management turnover, job openings, press and financial filings in our rating of overall viability.
Correction: Viability is financial stability. That’s primarily average annual growth rate, size of customer base and (recurring) revenue, and customer turnover. It has nothing to do with press. And it’s not job openings, it’s employee turnover. If the company is growing, of course it’s going to have job openings!

Positive, not Negative: Company X does not run full-service, reverse auction events on behalf of customers.
Correction: This means that they understand that (a) auctions generally aren’t strategic and that (b) even if the market conditions are optimal for an auction, you’ll get the best result if you engage a category expert and not an auction technology expert. Thus, unless you have those category experts, when you consider that (c) an auction tool should be easy to use, you probably shouldn’t be offering full service events.

Irrelvancy: Sourcing solution lacks optimization functionality (in the description of multiple vendors)
Fact: Of the 14 vendors that made the report, only two have true strategic sourcing decision optimization that meet all of the criteria I outlined years ago in the wiki-paper. Most of the vendors don’t have any optimization functionality at all!

Irrelevancy: Spending analysis: This is a very new product with minimal automated classification capabilities. Most of the cleansing and matching are done manually.
Correction: How many times do I have to say it? It’s the Analysis, Stupid. Classification is not analysis. Cleansing is not Analysis. Matching is not Analysis. (And the right way to do it is to manually define the classification rules so that future refreshes don’t corrupt any data elements that you’ve already cleansed. If you’re using an automated system that uses another organization’s rule set, you’re just asking for trouble!)

Scary: Spending analysis scalability with references reporting analysis of millions of transactions (in the description of a vendor)
Correction: Most big companies have millions upon millions of transactions in their systems. Many have tens of millions, if not hundreds of millions or billions. How could you possibly claim to have an enterprise spend analysis system if you can’t analyze millions of transactions? Considering that BIQ can analyze up to 50M transactions in real time on your laptop with its desktop solution, shouldn’t a true enterprise spend analysis solution be able to handle a few hundred million transactions? (And, before I finish, the report is wrong in dismissing BIQ as a desktop only solution. BIQ also offers a client-server version, which can take advantage of as much server power as you have — and handle hundreds of millions of transactions in real-time if you have the computing power, a thin-client externally hosted web-application through WTS or Citrix, and one of it’s distributing partners is currently beta-testing a new front end creator for the viewer that is built on BIQs XML interface and runs through your browser).

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