Vendor Analysis: Breaking out Strategic Sourcing as Gartner Defines It

In Gartner's most recent magic quadrant analyzing the "strategic sourcing" market as they call it, Debbie Wilson lumps together a hodge-podge of solution areas such as "strategic sourcing suites." Debbie bundles "strategic sourcing applications," "spending analysis," "supply base management" and "enterprise contract management" as part of her definition of strategic sourcing suites. Some of Gartner's labels are slightly comical -- when was the last time you bought or considered a class of solution called "supply base management??" But the components within each are quite clear: supply base management represents supplier management / supplier information management / supplier relationship management (non ERP definition). Still, the MQ is potentially misleading because many of the top providers in each sector (e.g., Upside in contract management, Aravo in SIM) -- don't even make the final cut because they don't deliver a complete "strategic sourcing" solution, as Gartner defines it.

More important than this, however, is the fact that Gartner's proposed integrated approach is not how the market looks at these independent areas from a decision-making standpoint. Our own research and involvement in various selections in recent years suggests that companies tend to select and evaluate many of these applications independent of each other. Because of this, in a series of posts beginning next week, we'll seek to examine each of these areas independently, and choose which one vendor companies should consider in each area, rather looking at the aggregate black-box score that Gartner uses to define their placement in an arbitrary 2 by 2. Don't get me wrong -- vendor rankings such as Gartner can be useful for some things. But in this case, I think it's essential for decision makers to examine the landscape in each of these areas independently as they attempt to arrive at a solution.

What we're not going to do is tell you who the best is -- at least not yet. Why? For one, the "best" is always highly subjective based on the criteria you decide to prioritize in your own decision criteria (e.g., in strategic sourcing, advanced optimization with the ability to support multiple constraints might be essential for some organizations, but extraneous for others). The most logical way to do a ranking like this would be to provide an integrative dashboard or modeler that lets you assign criteria based on your own prioritization (incidentally, Forrester offers some of this flexibility with their "Wave" ranking model today). Even these approaches, however, do not take into account the critical importance of the transparency of reference accounts in the evaluation process. In fact, one analyst firm in the healthcare technology field uses customer feedback as almost the entire basis for its rankings in a highly transparent manner (Gartner does reference checks, but does not share the information directly, mind you).

At the end of the day, no individual survey, report, wave, quadrant or blog post can do the subject of vendor evaluation justice. Companies should always look for multiple data points when it comes to short-listing providers as well as ranking and rating them. My hope is that Spend Matters can add a useful voice to this discussion and perhaps spark others to contribute to the conversation as well.

- Jason Busch

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