Risks involved when choosing a PPM software using the Gartner Magic Quadrant

Evaluating and choosing project and portfolio management software (PPM) for a bigger department or an entire company is usually done top-down. To control the complexity of the decision and the software introduction, individual projects are created. The task of the project team is then not just a decision and implementation of the tool. Classical project management tasks like stakeholder management, risk management, and project marketing are also crucial. When choosing the tools, it is vital to have a method for picking the most appropriate tool from the large number of tool manufacturers. Because of the different demands of the tool and of the individual IT–systems in place, the individual tools that are suitable can be quite different.

Gartner Inc. is a renowned consulting firm employing about 4000 employees worldwide. The company offers support for choosing a tool in the form of market research about PPMs – the so-called „Gartner Magic Quadrant. “ Decision makers like to use the Gartner study as a base for choosing their tools. For many reasons, however, this procedure is not sufficient.

Content and methodology of the Gartner study

The most recent Gartner study contains about 20 manufacturers of PPM software, which are evaluated using two criteria.

These two axes are again divided into two areas, low and high, consequently forming four quadrants. Gartner calls the four quadrants "niche players," "challengers," "visionaries," and "leaders," with the individual manufacturers being filed under these categories. The terms by themselves suggest a ranking. After all, who wants to have a ”niche player“ when he or she can have a leader?

Manufacturers who want to be included in the list are required to fulfill the following criteria:

• New customers were won in the past 12 months
• The PPM software made more than $10 million in sales
• The PPM software has been available for more than three years
• The software covers the crucial PPM procedures (planning, tracking, reporting, cost and portfolio management)
• The software offers integration with other data sources and products

At first glance, the abovementioned criteria for inclusion of a tool seem to be well-founded. This leads to a question: When, if ever, should a decision not be made based on the Magic Quadrant? First it needs to be said that the complexity of an introduction to the entire company is very high, and Gartner offers a “model” that gives the impression that decisions about the appropriate software can be made according to a simple model.

That models simplify the decision making is not a bad thing in itself. But if entire sections of the decision making process are left out, risks will result. Additionally, the Gartner model focuses more on aspects of manufacturer quality and less on the quality of the product. The position in the quadrant is mainly based on the research of economic lead figures rather than on an evaluation by a team of experts. The maturity of products is taken into account only secondarily. Usually this is done by interviewing the manufacturers and the users.

When making a decision based solely on the Gartner Magic Quadrant, the following risks need to be known and accepted:

Appropriate software may be mistakenly dismissed

The choice of available PPM-tools is limited, right from the start, to twenty, even though we know of many more good tools. Why some very good tools are not mentioned is not obvious from the outside. Some tool manufacturers will fail to reach the $10 million threshold. Used in such a way, this criterion becomes harsh and wrong. The same applies to the criterion ”The software covers the essential PPM processes.” A tool does not need to cover all essential PPM processes indiscriminately, but needs to cover the needed processes in a form that is suitable for the company. To look at it indiscriminately is efficient but not necessarily effective. In many cases, tools like Artemis, Cando, or Klusa can be a better alternative for you. An exclusion of a software choice should always be done based on rational arguments and not because Gartner did not use them in their model.

Consulting firms that know the market and that specialize in the introduction of project management software offer a much more valid alternative. They can provide you with a longer list that is based on experience in the market and that contains all the products relevant for you. The Gartner ranking only helps you with securing the political arguments of the decision if you are planning a large-scale introduction.

The chosen software is not suitable and does not cover your process demands

Every one of the PPM tools is very different with respect to features and architecture. If a tool is chosen based on Gartner only, without a well-founded evaluation, it is certain that a tool will be chosen that will not be accepted because it does not fit into the project environment. A tool needs to fit the demands completely. This is true not only for the processes covered by the company, but also for the kind of planned projects and the already existing IT-interfaces. If, for example, a tool is chosen to introduce portfolio management, it is possible that a software will be acquired that is completely deficient in the area of planning. The Gartner Magic Quadrant will tell you only that the chosen manufacturer has a high coverage in the market. Whether the software is appropriate for your company will not be apparent from the study.

You will get the wrong partner

Gartner is primarily focused on supporting large companies. For small and medium sized businesses, these big software solutions are usually too expensive, which leads to a deficient ROI. In many cases, the choice of an application that is not listed would be much more appropriate and, above all, help you maximize your profit. This is why a detailed TCO analysis needs to be done during the evaluation. A smaller partner may be better able and more willing to accommodate specific needs in terms of fitting a solution to your organization. Here, again, an experienced consulting firm can help to mitigate this risk, prepare the right choice, and find a fitting partner model.

Conclusion

The Gartner Magic Quadrant reveals manufacturers who have high market share. Therefore, decision makers like to choose these tools for political ease of introduction, top-down. However the complexity of decision making is reduced using the Magic Quadrant, it may still lead to a choice that does not reach its full potential because important aspects like the coverage of your processes or the picking of the right partner model were not taken into account. Don’t let anyone tell you that an evaluation and decision can be done exclusively based on the Gartner Magic Quadrant, but let an experienced consulting firm support you with the decision!

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