The Illusion of Gartner’s Magic Quadrant for Financial Close and Consolidation
Consistency Does Matter.
Three quick takeaways:
- Gartner’s impact: Gartner’s known for the Magic Quadrant, a revenue-generating tool analyzing market trends; their Market Guide is an alphabetical vendor assessment. However, discrepancies exist between their guides, causing confusion.
- Gartner’s methodology: Gartner’s approach to merging separate accounting processes in a single report might mislead companies. The recent Magic Quadrant for Financial Close and Consolidation solutions lacks clarity and doesn’t seem to align with the evolving industry practices Gartner itself has advocated for.
- Trintech’s absence: Trintech, recognized in Gartner’s Market Guide, questions why Trintech and other vendors weren’t included in the recent Magic Quadrant, especially given past recognition, leading to speculation about Gartner’s alignment with customer requirements.
I worked with Gartner since 1997 across four different technology vendors. I respect Gartner’s research and value how they are sometimes seen in the market. Gartner has made significant revenue (over 5B of revenue from research) on their core and legacy product: the infamous Gartner Magic Quadrant. The Magic Quadrant is a proprietary analysis to reveal market trends and maturity – while this analysis can be useful for decision making, the revenue model of the Magic Quadrant is simply to drive seat licenses, readership views, and content licenses from vendors to generate continuing revenue for Gartner. On the other hand, Gartner’s Market Guide is a playbook-style assessment of the various vendors in alphabetical order.
In November, Gartner released both their Market Guide for Financial Reconciliation Solutions and their Magic Quadrant for Financial Close and Consolidation Software vendors. While Gartner gets things right at times, just like everyone else, they also make mistakes which create confusion in the Office of the CFO space.
Gartner recognizes Trintech’s market-leading solutions in their most recent Market Guide for Financial Reconciliation, so why wasn’t Trintech included on Gartner’s Magic Quadrant, especially when we were listed in the previous Magic Quadrant and grew significantly.
Gartner Doesn’t Follow Their Own Advice
In the summer of 2023, Gartner began championing the concept of “composable technology” at their annual CFO conference. Rather than the current, traditional technology mindset that supports a single standardized process enabled through monolithic software systems, composable technology promotes the idea of companies seeking out best-in-class point solutions for each aspect of Finance and Accounting and integrating them. This has been Trintech’s strategy and business model for years – and it’s much easier to do this today than it was ten years ago via connectors.
Gartner seems to have ignored their own advice regarding composable technology in the Magic Quadrant by lumping Financial Close & Reconciliation in with the separate process of Consolidation – which doesn’t sit with one technology stack for many companies. The Consolidation process is utilized in the overall financial reporting workflow and is a by-product of the reconciliation, journal entry, and close task processes. In addition, companies with one ERP system or less complex subsidiary structures often leverage their ERP or other data reporting solutions for their consolidation needs. When reading the document, it seems Gartner seems to be out of touch when it comes to companies’ needs, especially as the ERP providers continue to include consolidation capabilities and enable companies to consolidate to one or a few ERP instances.
Combining Separate Accounting Processes into One Report is Misleading
The title of the Magic Quadrant is confusing to companies – since of the (14) companies in the MQ, (9) of them are not included Gartner’s Market Guide as they do not provide the critical and customary financial reconciliation solutioning and are primarily consolidation providers.
Trintech, on the other hand, is proud to represent our customers’ voices. With over 4,200 customers around the world, including the majority of the Fortune 100, Trintech remains a highly trusted partner. We are the industry-leader in high-volume transaction matching, with the ability to seamlessly process billions and billions of transactions a year, and an average auto-match rate of over 85%. Trintech offers best-of-breed solutions for the financial close process while partnering with innovative companies to build out a comprehensive ecosystem for the Office of Finance.
Gartner stresses that “Corporate controllers should not use this Magic Quadrant in isolation as a tool for selecting vendors and products” and “Magic Quadrants are snapshots in time.” Much like a hastily snapped and fuzzy polaroid, their most recent Magic Quadrant for Financial Close and Consolidation Solutions is poorly framed and captures an extremely myopic and limited view of its subject matter.
In this case, as with any act of misdirection, the magic is happening out of view of the audience.
Written by: Tamir Sigal, Chief Marketing Officer