What do companies look for when they seek out business management software? Functionality, user reviews, support, the ability to innovate, and more. For vendors to provide the functionality, support, and innovation that their customers deserve, they need to have a business model that allows them to make it happen, because while a vendor can make promises, why would you buy a software that can’t deliver?
What are Magic Quadrants?
This is why, in addition to their annual Critical Capabilities reports, Gartner offers an annual report called the Magic Quadrant, designed to inform potential customers about the vendor and their ability to deliver. These annual reports evaluate the company itself on two overarching factors—Ability to Execute and Completeness of Vision—each looking at how sustainable a company’s business model is.
Completeness of Vision and Ability to Execute
These Magic Quadrants are available for nearly any software or service imaginable, using standardized criteria to compare companies in each industry (i.e. Gartner offers apples to apples comparisons using their unique methodology). Ability to Execute and Completeness of Vision are evaluated using the following criteria.
|Ability to Execute||Completeness of Vision|
|· Product or Service
· Overall Visibility
· Sales Execution
· Market Responsiveness
· Marketing Execution
· Customer Experience
|· Market Understanding
· Marketing Strategy
· Sales Strategy
· Product Strategy
· Business Model
· Vertical/Industry Strategy
· Geographic Strategy
Leaders, Visionaries, Niche Players and Challengers
From here, the analyst firm positions each solution into one of four categories—Leader, Visionary, Niche Player, and Challenger—dependent on their ratings.
- Leader(High Ability to Execute, High Completeness of Vision),
- Visionary(Lower Ability to Execute, High Completeness of Vision),
- Niche Player(Low Ability to Execute, Low Completeness of Vision),
- Challenger(High Ability to Execute, Low Completeness of Vision)
The Evolution of Magic Quadrants Focused on Budgeting, Forecasting, Planning and Close
The budgeting, planning, forecasting and close process has always presented challenges for businesses, but the software market designed to help companies tackle these processes has continued to change, and the Magic Quadrants have continued to shift.
Until 2015: Corporate Performance Management Suites
Initially, the reports focused on the generic “Corporate Performance Management (CPM) Suites” category. While noting that there were two categories of CPM—Office-of-Finance and Strategic—evaluating competitors on their ability to “facilitate efficient, compliant and transparent processes within the office of finance. They enable CFOs and other business leaders to effectively guide strategic direction and increase organizational agility.” Read more about the 2014 CPM Magic Quadrant and 2015 Magic Quadrant here.
2016: Magic Quadrants Split between SCPM and FCPM
In 2016, Gartner found that the guidance was becoming convoluted due to the amount of competition for midsized and large organizations needing performance management solutions, noting a “breakup of the CPM Suite.” This created a Magic Quadrant for Strategic Corporate Performance Management (SCPM) and Financial Corporate Performance Management (FCPM), with FCPM looking at software for day-to-day and SCPM looking at larger budgeting, planning, modeling, and reporting. Learn more about the CPM split and Host Analytics’ appearance on SCPM and FCPM reports here.
2017: CPM Moves to the Cloud
Realizing another market shift from on-premises to the cloud, Gartner once again reassessed vendors on completeness of vision and ability to execute, but this time looked only at cloud-based SCPM and FCPM applications. This marked not only a shift in the market but a shift in the competitive landscape as well—Host Analytics moved up the chain of command from Visionary to Leader in both FCPM and SCPM, a well-deserved boost in “ability to execute” which in turn provided the company a promotion for the first multitenant cloud solution to make the Magic Quadrant.
2018: New Name, Same Leader
2018 marked another shift in the Magic Quadrant names, with FCPM becoming the Gartner Magic Quadrant for Cloud Financial Close Solutions and SCPM renamed the Gartner Magic Quadrant for Cloud Financial Planning and Analysis Solutions.
|Gartner Magic Quadrant for Cloud Financial Planning and Analysis Solutions||Gartner Magic Quadrant for Cloud Financial Close Solutions|
|· Financial Budgeting
· Financial Planning
· Integrated Financial Planning
· Strategy Management
· Financial Modeling
· Performance Reporting
|· Financial Consolidation
· Financial Reporting
· Reconciliation Management
· Close Management
· Intercompany Transactions
· Disclosure Management
Notably, even if the names have changed, at least one thing has stayed the same: Gartner has recognized Host Analytics as a leader in both Magic Quadrants.
“Host Analytics continues to redefine the market for EPM solutions, delivering the intelligence-based innovations our customers need to connect, collaborate and drive financial excellence,” said Dave Kellogg, CEO at Host Analytics. “We believe being named a Leader in both reports for two years running validates the strength of our product suite and receiving high satisfaction ratings underscores the unmatched value we provide our customers.”
We will discuss each of these Magic Quadrants in coming days, and we invite you to download both of the reports for free from Host Analytics here.
Learn More: Finance’s EPM Playbook
Financial management is a monumental task itself, and when you couple all of the internal pressures combined with the ever-present forces like sourcing good talent and putting defendable corporate numbers before the board, the pressures on Finance are nearly unbearable. If Finance is going to embrace the challenges of 2018 and beyond, it will have to do it with a solid strategy and understanding about the environment, along with opportunities both inside and outside of the department.
To enable Finance to meet these challenges, and propel itself forward, a finance organization playbook is intuitively appealing. To that end, we have identified six components of a finance organization playbook, along with a solution that can manage the process—enterprise performance management (EPM). Download the entire guide to EPM here.