Gartner for hunters and farmers

One reasonably easy prediction for 2010 is that user enterprises will start to see Gartner making increasing reference to their new “Market Clock” tool, announced in September last year. Like the Hype Cycle, Gartner are promoting the Market Clock as a methodology to support IT investment and, in this case, disinvestment* decisions.

* Side note: Gartner use the word “divestment” but that’s a mistake on their part. Divestment means selling something off to someone who values it more than you do. Disinvestment means withdrawing funding, in this case of an IT asset or service.

The Market Clock is frankly acknowledged to be a statement of something which CFOs have known for a long time: that a business investment has a finite life and that managers need to know when to get out, as well as when to buy in. What Gartner have done is to provide a framework through which this philosophy can be explicitly and systematically applied to IT. A statement of the obvious it may be, but Gartner are skilled at stating the obvious in a way that stimulates IT management to apply it – and that’s far from being a negative criticism!

The Market Clock, then, attempts to represent the market life of an IT asset in four stages which Gartner call (a) customised, (b) mass-customised, (c) commoditised and (d) disfavoured. The names aren’t all that clear, but the stages are a useful analysis framework. They represent (a) investment with recognised risk where intensive in-house resourcing may be required; (b) selection from a developing market where there is differentiation between options with increasing standardisation; (c) an established market where there is little differentiation between competitors except on price, and costs can be driven down; and (d) obsolescence, where the cost of supporting outdated technology begins to rise so that it overtakes the cost penalty of replacement and/or the business benefit delivered.

It’s not a new concept; my CIO in a large pharmaceutical company provided a representation of the same concept in a strategic briefing ten years ago. And I think his chart was clearer. I don’t find the clock concept convincing, because what goes round doesn’t necessarily come round. As business evolves, things do fall off the end; discontinue is always an alternative to supersede.

And Gartner paint themselves into something of a corner by using a clockface. They need to represent the time-to-next-stage (that is, when do I next need to review?) and they do this with symbols as in the Hype Cycle. But, as assets move round the clock, their level of commoditisation (that is, how easily can they be replaced?) is represented by distance from the centre: so, assets positioned near the circumference can be more easily replaced. Polar coordinates (r, θ for the cognoscenti) of this kind are not nearly so intuitive as their Cartesian (x, y) cousins.

Nor is understanding helped by the fact that the labels on the quadrants on the clockface (Advantage, Choice, Commoditisation, Replacement) aren’t the ones outlined in Gartner’s own description and reviewed above. Then there are (in Hype Cycle style) further snazzy names on the dial at midnight, 3 o’clock, 6 o’clock and 9 o’clock. To my mind this doesn’t add clarity but then I prefer clarity to marketing.

What do users need to do to make use of this tool?

First: be clear what the segments are really about. Develop your own understanding alongside the framework. What’s your attitude to early stage technology investment? Equally, what’s the attitude to retiring stuff? I remember a BCS talk some years ago from a Chief Architect of a major UK company, who told us that one thing the company’s investment policy made it difficult to do was close down obsolescent services. No-one would invest in replacement or retirement when there was no new functionality, irrespective of cost arguments. “Cheaper” gave way when “better” or “simpler” were not demonstrated.

Second: understand that the process represented by the Market Clock is not, in fact, a cycle. Not all early-stage technologies become part of the mainstream; the business advantage may fade or never materialise. Replacement, as a label for the fourth stage, is particularly unfortunate. Not all services are replaced when they are obsolete: they may simply be retired, because a replacement would not deliver enough benefit to the business to be worth it.

But, third: use this framework, or some other, to review established services and watch for the crossover point when the cost of ongoing maintenance exceeds the cost of replacement and changeover. The Market Clock suggests criteria: the level of standardisation (read: ease of switching vendors) and the level of commoditisation (read: outsource and expect to reduce costs).

Then, fourth: look at the other tools in your armoury. If you’re an established Gartner client, learn how to use the new tool alongside the Hype Cycle: Gartner suggest that the Hype Cycle is for technology hunters, and the Market Clock for farmers. But also have a look back at Forrester’s TechRadar, introduced in April 2008, which has always been a whole lifecycle tool.

The Market Clock suggests criteria to create a roadmap for moving assets from initial acquisition to retirement or replacement. If this isn’t part of your asset management strategy already, then this may stimulate you to create one. If, as is perhaps more likely, you already do this then here is a tool that may help to formalise or (equally important) effectively present your plans. But – like the technologies it helps you manage – the watchword is: use with care!

Links:
• Introducing the IT Market Clock, Gartner, 17 Sept 2009 (open access; if this link doesn’t work then go to Gartner.com and search for “Market Clock”
• Forrester get TechRadar on the road [updated], ITasITis, 25 Apr 2008 (and references therein)

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