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Gartner reviews SAP implementation partners in Magic Quadrant report

by Dave Hannon

November 17, 2010

 By Dave Hannon

Analyst firm Gartner this month put out its first-ever “Magic Quadrant for SAP ERP Implementation Service Providers, North America” to surprisingly little fanfare so I thought I’d point it out to ILN members here and highlight what I think are some of the interesting points in the report.

For the uninitiated, Gartner’s “Magic Quadrant” reports take a deep-dive analysis of a particular vendor landscape (in this case, North American SAP implementation service providers) and crams those providers into a basic 2x2 matrix for ease of digestion. (And yes, there is a LOT of debate about the pros and cons of this approach, but as Bill Belichick likes to say when he doesn’t want to express an opinion, “it is what it is.”).

I’ll let you be the judge of the vendor ratings (I’d only caution you to read the methodology information very closely and note that Gartner admits this is only a “small fraction of the service providers that implement SAP”), here are a few key takeaways I got from the report.

1. Gartner says there was a big increase in demand for ERP implementation partner services in 2010. The report says that these vendors “experienced rapid growth and high demand, resulting in high utilization rates, which brought about new challenges, such as difficulty staffing projects, delays in finding professionals with the right skill sets, especially for newer SAP products, and attrition.”

Takeaway: That’s good news for the vendors, but it’s definitely a factor to consider when selecting an implementation partner—you want one with experience, but not one that’s so busy they are skimping on resources. So when you’re hiring a partner ask a lot of questions and get a lot of recent customer references. An obvious suggestion, but one that always bears repeating.

2. Gartner says implementing the core SAP modules is a “mature” market and the challenge for implementation partners today “is to implement them more quickly, for less money, and to ensure they bring about the business benefits promised.”

Takeaway: SAP’s new Rapid Deployment solutions strategy plays very well into this trend and will heavily leverage SAP implementation partners. So if that’s something you’re considering, ask potential partners about their plans for RDS. And look for a deep-dive on SAP’s RDS strategy in the upcoming issue of SAP Insider, by the way.

3. The 21 vendors included in the report were selected based on a number of criteria, including size and revenue. But even with another 11 providers mentioned in the “market overview” section of the report, there’s a lot more that aren’t mentioned.

Takeaway: There’s a big ecosystem out there and this report’s listings and ratings – or any ratings that come from beyond your organization – should only be a jumping-off point. Gartne r says it straight out, the best evaluator for your organization is, well, your organization and these reports should serve as start.

4. Interestingly, Gartner says it decided to scrap its broader Magic Quadrant report that reviewed all North American ERP implementation service providers and replace it with this SAP-specific report and another Oracle-specific one.

Takeaway: Either Gartner sees the North American market really coming down to these ERP providers or there are other reasons for it moving towards this model. (I’m hoping to get more insight on their decision ASAP, so check back for an update).

Well those are my thoughts. Of course, I’d prefer to get your thoughts on this topic, keeping in mind we have a “no vendor bashing” rule here on ILN, so please keep comments constructive and good-natured (or else!). For example, I’d be curious to know:

  • Do you have any suggestions for how to evaluate an implementation service provider?
  • Do you see your implementation partners getting busier lately and if so, what have you done to ensure your projects get the right amount of attention?
  • Are there providers you’d recommend that aren’t on this list?
  • Do you see a correlation between the size of the customer and the size of the implementation partner? Should a small company use a big partner?

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