IDC MarketScape: Worldwide Compensation Management in Integrated Talent Management 2018 Vendor Assessment

Transcription

1 IDC MarketScape IDC MarketScape: Worldwide Compensation Management in Integrated Talent Management 2018 Vendor Assessment Kyle Lagunas Lisa Rowan THIS IDC MARKETSCAPE EXCERPT FEATURES SAP SUCCESSFACTORS IDC MARKETSCAPE FIGURE FIGURE 1 IDC MarketScape: Worldwide Compensation Management in Integrated Talent Management Vendor Assessment Source: IDC, 2018 Please see the Appendix for detailed methodology, market definition, and scoring criteria. July 2018, IDC #US e

2 IN THIS EXCERPT The content for this excerpt was taken directly from IDC MarketScape: Worldwide Compensation Management in Integrated Talent Management 2018 Vendor Assessment (Doc #US ). All or parts of the following sections are included in this excerpt: IDC Opinion, IDC MarketScape Vendor Inclusion Criteria, Essential Guidance, Vendor Summary Profile, Appendix and Learn More. Also included is Figure 1. IDC OPINION This IDC study represents a vendor assessment of the compensation management capabilities offered as part of an integrated talent management solution through the IDC MarketScape model. This research is a quantitative and qualitative assessment of the characteristics that explain a vendor's success in the marketplace and help anticipate the vendor's ascendancy. The evaluation is based on a comprehensive and rigorous framework that assesses vendors relative to the criteria and one another and highlights the factors expected to be the most influential to success in the market, in both the short term and the long term. Key findings include: Compensation management technology has matured quickly in the past several years. Where a few short years ago just a few talent vendors even offered a solution in any depth, today most suite vendors have a solution. The early use case for commercial compensation packages was to replace highly customized and largely indecipherable sets of spreadsheets used by compensation analysts. Now that compensation analysts have their tools, the emphasis is on giving managers the tools they need to be more self-sufficient, with visibility into budgets and across their teams. Compensation management was viewed as only moderate according to IDC's 2018 survey of human resources (HR) decision makers. Despite the ready availability of sophisticated compensation systems and growth in adoption, over 40% of organizations still do not utilize a formal system. This offers vendors in the space great opportunity to drive thought leadership and further quantify the value of modern compensation management capabilities in an effort to drive more demand for these solutions. IDC MARKETSCAPE VENDOR INCLUSION CRITERIA The criteria for inclusion of vendors in this IDC MarketScape analysis are as follows: Vendors must have solutions for a minimum of four of the five major talent management functions of recruiting, learning, performance management, career and succession planning, and compensation in general release as of December 31, Vendors must have a minimum of 250,000 employees/users live on the compensation management module as of December 31, 2017, a substantial number of which are in North America. The module must be part of a broader talent management suite. The compensation management module must be available for procurement on an individual basis and must be able to be deployed as a standalone solution IDC #US e 2

3 ADVICE FOR TECHNOLOGY BUYERS The vendors in this analysis are all worthy of consideration, bringing varying strengths and challenges to the fore. Some are better attuned to the needs of organizations in specific industries or across set geographies, others are known for working closely with clients to develop bespoke solutions to meet complex needs. All performed well in this year's IDC MarketScape assessment, responding to the increased importance of talent in the digital enterprise with vigor. But as each vendor is unique both in respect to its capabilities and strategies HR buyers should consider the following to help them make a decision that best meets their organizational needs: Consider your organization's size and industry sector. While most vendors have prioritized the needs of enterprise organizations, some see new opportunities (and less competition) in midmarket companies. An uptick in solutions for companies with <5,000 employees is good news for small and medium-sized businesses (SMBs). Other vendors continue to do well within specific industry verticals such as in higher education, healthcare, manufacturing, and professional services and consumer goods. While the strongest business cases for changing talent management vendors are rooted in addressing specific pain points in people process, it is important to consider a vendor's extended capabilities. Some vendors are making substantial investments in learning; others have strong talent acquisition capabilities. Whichever modules are most important to the buyer, buyers are advised to evaluate how vendors are leveraging investments across their extended suite of products to maximize value for all internal stakeholders (from executives to end users). Identify key innovation drivers. Is the organization undergoing extensive digital transformation and in need of reskilling and upskilling across a diverse and distributed workforce? Is the organization growing rapidly and in need of robust recruiting and onboarding systems? Is the company under pressure to develop and deploy advanced reporting and analytics capabilities to support data-driven decision making at all levels and across all functions? Whatever is driving disruption to the organization and to talent management strategies buyers must dig deep into vendors' client references to discover how other organizations are leveraging modern technologies to deploy new capabilities successfully, consistently, and at scale. VENDOR SUMMARY PROFILE This section briefly explains IDC's key observations resulting in a vendor's position in the IDC MarketScape. While every vendor is evaluated against each of the criteria outlined in the Appendix, the description here provides a summary of the vendor's strengths and challenges. SAP SuccessFactors SAP SuccessFactors has been identified as a Leader in this IDC MarketScape on worldwide compensation management in integrated talent management. SAP SuccessFactors is a provider of cloud-based HCM software with engaging talent solutions that include performance and goals, recruiting, onboarding, compensation, succession and development, and learning. The company provides social capabilities throughout its suite and deeply within Talent Management solutions. SAP SuccessFactors also delivers workforce analytics, workforce planning, and core HR (Employee Central) including payroll and time and attendance IDC #US e 3

4 Following its major 2016 introduction of continuous performance management (CPM), SAP SuccessFactors continues to invest in all areas of talent management with enhancements to CPM, as well as innovations in recruiting, learning, compensation, and career development. The company also introduced updates in user experience, extensibility, analytics, and support for key business initiatives. SAP SuccessFactors has expanded postsales customer enablement and support teams. The company continues to add talent management training courses, which are included with a cloud subscription via the SAP Learning Hub. SAP SuccessFactors has broad, deep relationships with key industry, technology, and consulting partners through SAP's PartnerEdge Program. Based on SAP's extensible, connected cloud platform, and working with its partners, SAP SuccessFactors delivers comprehensive solutions to today's talent management challenges. In July 2017, SAP announced Greg Tomb as president, SAP SuccessFactors. Tomb is a 19-year SAP veteran who most recently led the SAP HANA Enterprise Cloud business in addition to overseeing sales for SAP's Global Services organization. Tomb oversees SAP's entire HR business unit, which includes SAP SuccessFactors cloud solutions and SAP ERP HCM on-premise solutions. Recent developments include: Career site builder. Intuitive, point-and-click, and drag-and-drop experience for recruiting teams to easily build and maintain career sites Learning marketplace. Comprehensive learning and commerce solution for external audiences (built with SAP SuccessFactors Learning and SAP Hybris) Mentoring. As part of career development, includes intelligent mentor matching that recommends "good-fit" mentor mentee relationships based on deep talent analytics Expanded analytics. More widely used within talent solutions to make recommendations (see Mentoring bullet point) and provide guidance via Insight Panels (Plus, SAP SuccessFactors Workforce Analytics is now integrated with SAP Analytics Cloud and SAP Digital Boardroom.) Headcount planning. A recently announced integration to SAP RealSpend, which leverages S/4HANA Finance (3Q17 Release) Spot awards. Through mobile and desktop for both monetary and nonmonetary awards, with configurable award categories, levels, and country-specific guidelines New mobile app for ios. Updated app based on SAP partnership with Apple, as well as continued enhancements across employee, manager, and HR experiences SAP SuccessFactors App Center. An online directory to explore and purchase over 150 partner solutions many built on SAP Cloud Platform with delivered integration to SAP SuccessFactors Broader support for key business initiatives. Including total workforce management (with deeper SAP Fieldglass integration), diversity and inclusion, and health and well-being SAP is publicly traded on the NYSE: SAP. Strengths SAP SuccessFactors continues to innovate its portfolio of talent and HR modules and is making significant investments in user experience to drive more adoption and deepen value within its client base. The breadth of the talent suite and the depth of each module distinguish SAP SuccessFactors in this space, and clients are beginning to realize the extended capabilities of the SAP Cloud with its talent analytics. The compensation module is a robust and full-featured solution. Strong modeling and 2018 IDC #US e 4

5 embedded analytics make it a useful solution to both compensation analysts and managers. Clients are well satisfied with the product road map, including budding total workforce management capabilities powered by integrations with SAP Fieldglass and SAP's compelling work as part of the Business Beyond Bias initiative. Challenges SAP SuccessFactors is not alone in the end-to-end HCM solution market. SAP SuccessFactors needs to continue to deepen capabilities to fend off the competition. The market is seeing emerging feature/function parity across compensation offerings, and staying ahead of the competition will be increasingly difficult but no less important. Consider SAP SuccessFactors When For HR leaders under pressure to drive meaningful, tangible change in the employee experience including candidate relationship management, new hire onboarding, and career management finding the right partner to power these initiatives is critical. SAP SuccessFactors' legacy of pushing the envelope in talent management coupled with new and visionary leadership makes it a prime candidate for any enterprise organization. APPENDIX Reading an IDC MarketScape Graph For the purposes of this analysis, IDC divided potential key measures for success into two primary categories: capabilities and strategies. Positioning on the y-axis reflects the vendor's current capabilities and menu of services and how well aligned the vendor is to customer needs. The capabilities category focuses on the capabilities of the company and product today, here and now. Under this category, IDC analysts will look at how well a vendor is building/delivering capabilities that enable it to execute its chosen strategy in the market. Positioning on the x-axis, or strategies axis, indicates how well the vendor's future strategy aligns with what customers will require in three to five years. The strategies category focuses on high-level decisions and underlying assumptions about offerings, customer segments, and business and go-tomarket plans for the next three to five years. The size of the individual vendor markers in the IDC MarketScape represents the market share of each individual vendor within the specific market segment being assessed. Share is determined by the vendor-supplied number of client lives served. Current capabilities in compensation management are close among the vendors covered, as indicated by the clustering on both axes. However, those vendors with greater longevity in the compensation management market have an edge over newer market entrants. IDC MarketScape Methodology IDC MarketScape criteria selection, weightings, and vendor scores represent well-researched IDC judgment about the market and specific vendors. IDC analysts tailor the range of standard characteristics by which vendors are measured through structured discussions, surveys, and interviews with market leaders, participants, and end users IDC #US e 5

6 Market weightings are based on user interviews, buyer surveys, and the input of IDC experts in each market. IDC analysts base individual vendor scores, and ultimately vendor positions on the IDC MarketScape, on detailed surveys and interviews with the vendors, publicly available information, and end-user experiences in an effort to provide an accurate and consistent assessment of each vendor's characteristics, behavior, and capability. IDC conducted an end-user survey, completed in March 2016, of 511 HR decision makers of firms with 100+ employees. Included in the survey were specific questions about vendors covered in this analysis. Questions included satisfaction with a variety of factors, including: Depth and completeness of current solution Confidence that future releases will meet the organization's needs Appropriateness of a delivery model Comfort with upgrade release schedules Cost-effectiveness Integration Customer service Market Definition IDC defines talent management as those functions that serve to attract, develop, reward, and retain the workforce. Made up of a variety of functions, talent management includes the areas of recruiting and staffing, learning and development, performance management, compensation management, and career and succession planning all supported by a base of competency management and assessment. This IDC MarketScape focuses on the market for solutions and services comprising the compensation management function that serves as part of the integrated end-to-end market. While talent management is still a young market, it is beginning to mature, with greater market penetration. It is a market that has gained and continues to gain a lot of attention and is of interest to both buyers and suppliers. Subsequent sections of this document offer definitions and the characteristics IDC identifies as important for success in this market. There have been a few compensation modules available for a number of years, but more generally, the market for compensation management is the newest among the various talent offerings. Until recently, compensation analysts have relied upon spreadsheets, with few, if any, tools for managers. Background The market for talent management has evolved from a market that largely focused on a single function, such as recruiting, to a more mature market that considers the many facets of talent. Both senior line management and HR executives are considering how talent strategies might affect business outcomes such as improved customer satisfaction. To answer such a question, one needs to think about all facets of talent. Improving customer satisfaction may entail choosing the right job candidates from a "success profile" formed from assessing those doing the job well today. It may mean that key skills are lacking and need to be improved, or it may mean sharpening retention strategies for high performers IDC #US e 6

7 The market for compensation management solutions is beginning to mature, and we have just recently begun to enjoy the benefits of formal linking of compensation with the other talent management functions. While there are standalone systems from vendors that offer only performance management, this IDC MarketScape looks at compensation management from vendors offering a broader suite. There is a market for standalone solutions, but IDC's research points to greater buyer interest in integrated talent. Overview of Compensation Management in the Integrated Talent Management Market The business imperative to tie talent strategies to business objectives and outcomes has created a market category for integrated talent management solutions. Providers come to this market from a variety of backgrounds some from learning and development, some from recruiting, some from the broader HR systems market, and some from compensation and performance each looking to meet the end-to-end talent management need. Most but not all of the integrated talent management vendors offer their own compensation management module. Compensation management applications are designed to automate the process of planning and administering workforce compensation, providing both compensation administrators and managers tools to rationalize and confer salary actions. The compensation functionality covered in this document does not encompass tools for managing the highly specialized area of sales compensation. Key features include: Salary budgeting and management for both compensation professionals and managers Easy comparisons of salary with performance Graphical approach for highlighting inequity in pay Calculation and distribution of bonuses, spiffs, royalties, and incentives to employees Compensation analysis using internal and external data for retention risk analysis Payroll and payment engine interfaces Each of the talent functions is important in its own right, but bringing them together provides even greater value to each function and in total. The potential benefits are too numerous to cover, but as examples, consider the integration of compensation with other talent functions and the resulting use cases: With performance to set and monitor salaries and incentives that are performance and outcome based With career and succession to help identify appropriate successors not just on skills but on salary readiness With recruiting to provide appropriate remuneration to match the opening With performance to measure the outcomes of salary and bonus actions 2018 IDC #US e 7

8 LEARN MORE Related Research Worldwide Human Capital Management and Payroll Accounting Applications Software Market Shares, 2017: Growth Continues (IDC #US , June 2018) Market Analysis Perspective: Worldwide Human Capital Management Applications, 2017 (IDC #US , September 2017) Worldwide Human Capital Management and Payroll Applications Forecast, (IDC #US , June 2017) IDC MarketScape: Worldwide Compensation Management in Integrated Talent Management 2016 Vendor Assessment (IDC #US , May 2016) IDC MarketScape: Worldwide Integrated Talent Management 2016 Vendor Assessment (IDC #US , May 2016) IDC MarketScape: Worldwide Learning Management in Integrated Talent Management 2016 Vendor Assessment (IDC #US , May 2016) IDC MarketScape: Worldwide Performance Management in Integrated Talent Management 2016 Vendor Assessment (IDC #US , May 2016) Synopsis This IDC study represents a vendor assessment of the compensation management capabilities offered as part of an integrated talent management solution through the IDC MarketScape model. This research is a quantitative and qualitative assessment of the characteristics that explain a vendor's success in the marketplace and help anticipate the vendor's ascendancy. The evaluation is based on a comprehensive and rigorous framework that assesses vendors relative to the criteria and one another and highlights the factors expected to be the most influential to success in the market, in both the short term and the long term. "Vendors that are laser focused on the unique needs of specific verticals continue to win new logos and achieve greater results with clients in these areas," says Lisa Rowan, research vice president, HR, Talent, and Learning Strategies for IDC. "But just as important is a vendor's ability to support clients beyond implementation through critical client success strategies and strong partnerships to drive adoption and enable transformation in talent management." 2018 IDC #US e 8

9 About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make factbased decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Global Headquarters 5 Speen Street Framingham, MA USA idc-community.com Copyright and Trademark Notice This IDC research document was published as part of an IDC continuous intelligence service, providing written research, analyst interactions, telebriefings, and conferences. Visit to learn more about IDC subscription and consulting services. To view a list of IDC offices worldwide, visit Please contact the IDC Hotline at , ext (or ) or sales@idc.com for information on applying the price of this document toward the purchase of an IDC service or for information on additional copies or web rights. IDC and IDC MarketScape are trademarks of International Data Group, Inc. Copyright 2018 IDC. Reproduction is forbidden unless authorized. All rights reserved.