SAP and Oracle customers should look to their ERP vendors for IT project and portfolio management, according to a new Gartner Magic Quadrant report.
It ranks the two ERP vendors as challengers in the market for IT project and portfolio management (PPM) applications, which organize and prioritize projects in terms of factors like cost, manpower and time. SAP and Oracle customers, particularly those heavily invested in the financial management software packages, should turn to their respective vendors for PPM because of their ability to leverage data in their existing applications.
Oracle E-Business Suite Financials users can use Oracle Projects not only to calculate project cost but to match project budgets to schedules. Users of SAP ERP Financials and SAP Business Information Warehouse (SAP BW) can do the same with xRPM, an SAP xApp. Customers say xRPM also has good knowledge transfer, product expertise and professional service, according to the report.
"[SAP's and Oracle's] whole strategy is to make sure their installation base isn't eroded by pure-play vendors," said Daniel Stang, the report's co-author and principal analyst with Stamford, Conn.-based Gartner Research.
Overall, the market for IT PPM applications was unsettled last year. Some providers grew, the report states, while others declined because of the economy and tighter IT budgets.
SAP's xRPM user base grew by about 45%, according to data provided by SAP. It now has a total of 260 users, 80 of which purchased and implemented the xAPP in the last year.
A total of 70% of those customers are using xRPM for their IT departments, according to SAP.
Oracle wouldn't disclose how many PPM customers it has or how many of those were using it to manage IT. Oracle's PPM applications include Oracle Projects and Oracle Project Management.
Gartner's Magic Quadrant reports rank vendors (in descending order) as leaders, challengers, visionaries or niche players.
The leaders in IT PPM included CA Clarity, Compuware, HP PPM and Planview. Gartner also named as leaders PPM vendors that provide IT-specific PPM as well as PPM for other industries, including Primavera Systems, Microsoft Project and the on-demand PPM vendor Daptiv.
Gartner defines leaders as providing portfolio management that goes beyond simply gathering together information on a single project. Leading applications also include a view of what else IT could invest in and align strategic programs.
Challengers, like leaders, have product depth combined with enough experienced technical sales support to effectively reach the market. But, unlike the leaders, their products emphasize one core area, such as project cost management, without all-around strength across most areas of IT PPM functional areas.
For example, SAP and Oracle are really only interested in targeting their own users with IT-related PPM offerings, the report said. In turn, Oracle's PPM applications have limited portfolio analytics, and xRPM's usability needs to be improved.
"They've got some of the basic things in there to make sure their customers don't get completely steered away," Stang said. "ERP vendors never targeted internal IT until this [PPM] market surfaced. They're not the pure-play PPM [vendors] in IT that are looking to drive the applications portfolio."
In selecting a PPM application for your IT department, Stang recommends looking at who's asking for it, what the expressed purpose is, and how much you want to spend.
If you want better IT project capital reporting and better alignment reporting, look to SAP and Oracle.
"If the IT department isn't completely asking for this thing," Stang said, "then the ERP vendors make a lot of sense."
But if you need more out of it, look to the leaders.
"If you're a project manager in the trenches of IT and you've got service requests, formal projects, you know you've got 20 things coming down the pipeline that need to get done -- the answer is, you're going to go to an IT management vendor," Stang said.
He had reservations, though, about whether ERP vendors could ever become leaders in this market.
"It depends," he said. "Ultimately, they could. It starts with understanding and also quite pointedly focusing on an IT management market, not an ERP or business management market. They might only get so far."
Or perhaps ERP vendors like Oracle and SAP will just start buying these niche vendors.
"They probably will," Stang said. "Larry Ellison has a bit of a trigger finger these days. He's buying companies left and right. [He's saying] 'I'm tired of trying to be this thing. Let's just buy it.' "