Monday, January 28, 2013

Is Magic Quadrant Magic Bullet

CIOs are all familiar with Gartner’s Magic Quadrant (MQ) or Forrester’s Wave, however, when IT leaders evaluate vendors or make procurement decisions, is Magic Quadrant magic bullet?

1.   MQ as Guideline to Competitive Landscape

The Gartner MQ is a very good guideline to understand the competitive landscape about a particular product set. It's good at indicating the movement of vendors, and their associated strengths and weaknesses. That being said, it's a guideline and the "leader quadrant", but it is not applicable to every purchasing decision. As a CIO guiding companies on making technology decisions, one need balance the GMQ with their specific business challenge/environment/SWOT and look to make the most appropriate decisions. The good advice is to always take a step back and refer to your objectives and the bigger picture.

  • The Magic Quadrant is a good tool for making the business understanding the options available. The CIO needs to base his/her decisions on many more factors. MQ is just one of nice references. The Magic Quadrant is useful in making procurement decisions at certain level, CIOs can use it to evaluate vendors and IT products/services, as high quality, dedicated & knowledgeable analysts put a lot of effort on it, there's value to study on it; From this perspective, the CIO is making a safe bet, by relying on the rating of a supposedly independent technology analyst & rating agency.  
  • The Magic Quadrant is also useful for confirming that you have identified and reviewed all the major players in the market segment and demonstrating to the Board that you have done so. It provides independent reinforcement of your recommendation to the Board who ultimately approve the expenditure. If a solution is not in the MQ,  then it drives you to review your recommendation to ensure that the issues identified either do not have a material impact on your situation or that other advantages such as business-critical features have sufficient value to outweigh the issues. 
  • The suggested approach is to leverage the MQ and Forrester Wave as a starting point to narrow down a shortlist of vendors. The next step is to get on the horn with an analyst and discuss your current landscape and what triggered this buying event. Maybe even discuss to look at other vendors that may not be mentioned on either MQ or Wave. And then a bake-off with 2 vendors that the analysts supply you with. This has been a pretty good practice with buyers. At the end of the day, executives are just looking for validation for the purchase so they can say that the leaders in the industry have agreed to the decision. It's a good insurance policy. 

2. Magic Quadrant is not Magic Bullet

Overall the Quadrant is a great marketing tool but wise IT leaders may not use it to base entire purchasing decision just on the Magic Quadrant alone! As MQ is just one small piece you should explore and should not be the sole basis for any decision.

  • Obviously relying just on the MQ may be a bad idea. CIOs do need to create Business Cases with much more parameters to help the decision making process, justifying the investment of every penny. The organization’s specific requirements should be part of the Business case. Sometimes the quadrant is focused on technical functionality, giving a wrong representation about the player who is working on integrated solution able to support process with a platform approach. In addition, businesses should be more open to select visionary vendors or niche players, technology is so dynamic today, there're always many good innovative vendors around, even they are not on MQ or wave, they are still worth trying, if only you follow the right set of principles to evaluate and manage vendor life cycle. 
  • Many technology vendors today are moving away from the “pay to play” engagement, and part of the reason is that it’s cost prohibitive in this economy for the smaller vendors to rate well no matter how innovative their technology. While analyst research provides an invaluable service to the marketplace for technology vendors, but the analyst’s role is beginning to change as validation role rather than a predictor role in the technology market. 
  • Social influence/ladder is the new silver lining (actually happening now) to make impact on many knowledge driven activities, from wisdom sharing to message distribution, from talent pipeline growth to product/service recommendation, it's great complement to traditional approach in decision making. Social media networks are providing information on the latest trends and the analysts are confirming the players as more and more technology buyers are turning to social networking sites to find new IT solutions. These social forums allow them to share challenges with their peers and get recommendation on how to deal with them. 
In summary, Magic Quadrant is still good enough to be used for comparison and maturity of products/ technology/trends to be considered for the Enterprise, but it should be used for ideas not decision making, and it is just a tool and needs to be a part of the due diligence involved in a major procurement decision.


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