Since joining Gartner 4 years ago, every client has challenged me with this Hamletic question on which provider they should pick amongst the ones in the Magic Quadrant. One of my friends, a Global CIO for a $8Bn company once told me: “service provider selection is very easy, just pick the top vendor in the Leader quadrant”.
We had an interesting discussion as we obviously disagreed, but pointing only at the top Leader is not the best use of a Magic Quadrant, especially when talking about services.
A provider is positioned in a particular quadrant based on an extensive analysis across the full-service life cycle in many industries, regions and other criteria. However, each client company’s selection criteria, starting point and objectives are different, and vendors in the Challengers, Visionaries and Niche Players quadrants can very well be a better choice. Imagine: if all clients would act like my friend (yes, we are still friends) we’ll end up with a massive service provider consolidation and only the Leaders will survive. Luckily many clients understand well how to use Magic Quadrants, and engage with us to understand which can be the area of strengths and weaknesses of each service provider. Don’t get me wrong, there are many clients that will be better suited with a service provider in the Leader Quadrant, but that’s not the “default answer”.
In the Magic Quadrant for SAP S/4HANA Application Services there are 21 different vendors that covers a wide set of capabilities, regions and industries. There are certain industries and solutions where the Niche players have more expertise than the leaders, and expertise should be a key criteria in every provider selection. Another important factor readers need to take into consideration is that to produce our Magic Quadrant there is a very deep data analysis, including engaging with a hundreds of customers to verify the service provider success in meeting the project expectations. As the numbers shows in Optimize Your SAP S/4HANA Service Provider Selection by Leveraging Gartner Client References it is clear these projects are not walks in the park, and there are many challenges ahead.
The key challenge that always concerns me is that almost half of organizations struggle to meet the timeline of their project, with some over 6 months late. Obviously this is not always (and only) the service provider fault, but it’s an element clients need to take into careful consideration when thinking about provider selection and the contract to put in place.
Together with my colleagues Susan Tan, Allan Wilkins and Jaideep Thyagarajan we also published the Critical Capabilities for SAP S/4HANA Application Services that provides a much more focused view on the three main service areas: Assessment & Planning, Implementation, and Management.
As you can see, this is a complex topic and there are multiple research notes (subscription required) that can help in each situation. We are available to Gartner clients to discuss this in more detail for their specific case.