Once again, Oracle ERP Cloud was named a 2019 Gartner Magic Quadrant Leader for Cloud Core Financial Management Suites for midsize, large, and global enterprises. Gartner is a global research and advisory firm that provides advice and tools for leaders in IT, Finance, HR, and more.

Gartner says that by 2024, 60 percent of all midsize core financial management application projects, and 30 percent of large and global ones, will be public Cloud implementations. Gartner’s definition of this market includes cloud core financial management suites marketed and sold to the following sizes of enterprise:

• Midsize enterprise: Annual revenue from $50 million to $1 billion
• Large enterprise: Annual revenue from more than $1 billion to $5 billion
• Global enterprise: Annual revenue of more than $5 billion

Through 2024, digital technologies will bring new capabilities and efficiencies, as well as integrated best-of-breed financial planning and analysis and financial close capabilities, into the core financial management suite.

Since the previous version of the Magic Quadrant in 2018, Gartner has seen a major increase in the number of end-user inquiries about Cloud solutions in this market, mainly of the public Cloud variety. During the same period, the number of inquiries about on-premises and hosted solutions has fallen dramatically.

The major attractions of Cloud solutions in this market include:

• The ability to keep up to date with new releases (customers are generally forced to stay within one or two releases of the current one)
• A more consumer-like interface that eases training and onboarding
• Digital capabilities, including artificial intelligence (AI), machine learning (ML) and robotic process automation (RPA) – most of these capabilities will not be retrofitted to legacy on-premises platforms
• Improved agility, gained through faster introduction of new functionality such as subscription billing, revenue recognition, and financial accounting hubs
• More emphasis on end-users (in the office of finance) managing the applications, with less reliance on IT staff

How to Interpret the Gartner Magic Quadrant

It’s important to note that just because vendors are classified as Gartner Magic Quadrant Leaders does not mean that Gartner believes their solution to necessarily be the best, in terms of functionality and technology, for all use cases. All the vendors featured in this Magic Quadrant deliver viable suites and are equally worthy of evaluation.

Gartner plans to publish a partner Critical Capabilities report in the second quarter of 2019, to assess vendors in light of a number of use cases. It will help you identify which solutions are most suitable for your needs. The use cases will include the ability to serve companies of various sizes, as well as those for business units and for EMEA-based enterprises.

Oracle ERP Cloud in the Gartner Magic Quadrant

Gartner developed the “Magic Quadrant” as an aid to help leaders in midsize, large and global enterprises choose a suitable vendor of Cloud solutions during the shift from on-premises to cloud implementations. The Magic Quadrant measures financial management suites based on their ability to execute and completeness of vision.

Based on the measurements, suites fall into one of these four quadrants:

• Niche players: Low ability to execute and low completeness of vision
• Visionaries: Low ability to execute and high completeness of vision
• Challengers: High ability to execute and low completeness of vision
• Leaders: High ability to execute and high completeness of vision

Oracle ERP Cloud was one of only three that was placed in the Leaders quadrant – ranking highest in both the ability to execute and completeness of vision. The other two in the Leaders quadrant were Workday and Oracle (NetSuite).

Gartner defined Oracle ERP Cloud as a leader in Cloud Core Financial Management Suites, highest in the ability to execute, and furthest in the completeness of vision. Gartner believes that Oracle ERP Cloud demonstrates a market-defining vision and a clear ability to execute this vision. It was placed highest in the ability to execute due to Oracle’s ability to execute judged by its success in fulfilling its promises. Oracle ERP Cloud was also placed at the furthest completeness of vision, judged by its ability to anticipate customer needs and Cloud technology needs.

Oracle offers a number of ERP solutions, all of which include core financial management capabilities. Oracle ERP Cloud is a suite of core financial management capabilities that includes accounting hub, revenue management, project management, procurement, supply chain, and risk management.

According to Gartner, it is suitable for upper-midsize, large and global enterprises, with the number of large and global enterprise customers growing rapidly. Oracle ERP Cloud is also suitable for a wide range of industries and has customers in all major regions. Oracle ERP Cloud was categorized as a Leader due to its broad and deep financial management capabilities, international capabilities, and strategic focus on selling and marketing the solution in all regions.

Gartner identified both strengths and cautions for Oracle ERP Cloud.

Oracle ERP Cloud Strengths

Some strengths of Oracle ERP Cloud that Gartner identified include:

• Oracle ERP Cloud provided a very strong demonstration for this Magic Quadrant and is among the leading offerings. While its overall position was strong, this was not reflected uniformly in the customer reference survey. This is, in part, due to much of the advanced functionality being newer and not yet fully deployed by customers. Oracle has a very strong roadmap for AI/ML, but only limited functionality in the current release. Its accounting hub use cases are strong for “beyond financial services” types of transactions, as well as for merger and acquisition integration use cases.
• Oracle ERP Cloud has strong global support for language, currency, and regulatory support, and has a large portfolio of customers across industries.
• Oracle’s customer reference scores place it just below the midpoint for customer satisfaction, and slightly above it for functionality (all functional areas being above the mean for this Magic Quadrant). Oracle has a strong vision for financial functionality, is well-known to financial professionals, and has messaging for finance customers that do not get lost in a broader suite proposition.

Oracle ERP Cloud Cautions

Some cautions about Oracle ERP Cloud that Gartner identified include:

• Oracle ERP Cloud can be implemented in a simplified “vanilla” fashion; however, many implementations are complicated due to the organization’s need for complex process support. Looking at both the customer reference responses and Gartner client calls, it is clear that many organizations underestimate this complexity and often overrun their implementation budgets.
• Customer references for Oracle stated that both Oracle and third parties underestimate the effort (resources and time) required to implement a well-configured product. They did, however, appreciate Oracle’s level of involvement in third-party implementations. Also note that while Oracle’s AI/ML roadmap is strong, customer deployment of advanced functionality remains inconsistent. This is due, in large part, to the newness of the functionality and the stage of cloud deployment at customer organizations.
• The rapid adoption of Oracle ERP Cloud by customers means that implementation skills and resources can be limited in some countries. Also, implementation partners do not always keep up to date with quarterly releases, creating a delay between availability and implementation. When Oracle implements alone, it utilizes the Soar program for conversions. Oracle needs to quickly move Soar out to its consulting partners; however, there are no plans for this at present. It continues to invest heavily in training its partners, and the number of trained consultants is growing in response to demand.

What Core Financial Management Suites Should Include

According to Gartner’s definition, core financial management suites include:

• The functional areas of general ledger (GL), accounts payable (AP), accounts receivable (AR), fixed assets (FA), project accounting, project costing and project billing
• Newer capabilities, when available for inclusion, such as subscription billing, revenue recognition and account hub, as well as process enhancements aided by AI and ML
• Financial analytics and reporting capabilities, including the provision of financial information (via profit and loss [P&L] statements and balance sheets, for example) and of key performance indicators to managers and executives. These capabilities are also gradually being targeted with AI and ML.
• Basic indirect purchasing functionality, from creating a requisition through to purchase order processing and AP invoice matching and payment. Many enterprises — especially midsize ones — need some basic procurement functionality within their core financial applications.

Two vendors that were previously in this Magic Quadrant (see the Vendors Added and Dropped section) were eliminated due to their core financial management systems not being actively sold or marketed as a stand-alone system. While most of the vendors found in this report offer capabilities beyond core financial management, this Magic Quadrant evaluates them purely on the capabilities of their cloud core financial management suites. It also evaluates their ability to market, sell and support solutions for finance organizations. This Magic Quadrant also offers a concise picture of the market’s landscape, growth, and evolution. It also records how the overall market has progressed even though some vendors have struggled to keep up with the pace of change.

For more information about the criteria for the Gartner Magic Quadrant, check out the full report attached below.

Additional Resources

For more Oracle ERP Cloud resources, case studies, best practices, etc., check out Quest’s Oracle ERP Cloud Content Center. There are resources and training available for all aspects of ERP Cloud, including risk management, financials, extensions, and more!