IDC MarketScape: Worldwide Performance Management in Integrated Talent Management 2016 Vendor Assessment

Transcription

1 IDC MarketScape IDC MarketScape: Worldwide Performance Management in Integrated Talent Management 2016 Vendor Assessment Lisa Rowan THIS IDC MARKETSCAPE EXCERPT FEATURES: SAP IDC MARKETSCAPE FIGURE FIGURE 1 IDC MarketScape Performance Management in Integrated Talent Management 2016 Vendor Assessment Source: IDC, 2016 Please see the Appendix for detailed methodology, market definition, and scoring criteria. May 2016, IDC #US e

2 IN THIS EXCERPT The content for this excerpt was taken directly from IDC MarketScape: Worldwide Performance Management in Integrated Talent Management 2016 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 performance 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, both in the short term and long term. Key findings include: Some high-profile organizations like GE, Adobe, and Deloitte are beginning to rethink performance management and are eliminating performance ratings and annual reviews altogether. Instead, they have moved to a more continuous feedback process with hopes that it will yield better visibility into true performance and provide improved business outcomes. This dramatic change in performance management will take time to become mainstream, and performance reviews will not quickly disappear, but employers are beginning to look for better ways to more continually track and engage on performance. Wise vendors in this market are rethinking their performance management systems to reflect this drive toward continuous performance. Much is being discussed in the human capital management (HCM) market about employee engagement, an assessment of how committed workers feel to their jobs and employers. While difficult to define and measure, applications that tout management of employee engagement are popping up. As performance management vendors bring forth solutions for continuous performance, they may wish to consider continuous sentiment feedback as well. IDC research into the perceived ownership responsibility for performance management by human resource (HR) versus line-of-business managers indicates that hiring managers want more help when it comes to goal creation. Managers express a particular need for assistance in translating top-level company goals into actionable goals for their business unit. 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 performance management module as of December 31, 2015, a substantial number of which are in North America. The module must be part of a broader talent management suite IDC #US e 2

3 The performance management module must be available for procurement on an individual basis and must be able to be deployed as a standalone solution. ESSENTIAL BUYER GUIDANCE The vendors in this analysis are all worthy of consideration, bringing varying strengths and challenges to the fore. 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. Some vendors, such as Halogen Software and SilkRoad, focus on the needs of the midmarket, while others primarily look to serve large enterprises. In addition, some vendors have vertical-specific solutions such as higher education for PageUp and several key verticals by PeopleFluent and Halogen and others. Determine a logical starting point. Which talent function or functions are presenting the greatest source of pain? Gaining team consensus on a starting point can make projects much more effective. But be careful to consider the big talent pictured regardless of a starting point. Choosing a single-point solution without regard to the long term may prove challenging down the road. Think big talent picture. Even as you may begin with a logical entry point, look at your full talent management portfolio. Acquiring a set of disparate talent management modules may solve today's immediate need, but such a decision will yield multiple talent profiles and a disconnected flow of talent information. Bring in all the stakeholders to drive toward a solution that will open up a fluid exchange for talent management. 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 According to IDC analysis and buyer perception, SuccessFactors is an IDC MarketScape Leader worldwide in performance management in integrated talent management. SAP SuccessFactors is a provider of cloud-based HCM software, and in addition to comprehensive talent solutions including performance and goals, recruiting, onboarding, compensation, succession and development, and learning, it delivers core HR and payroll (Employee Central) as well as workforce analytics and planning. Employee Central is garnering much industry attention for both clients converting from SAP onpremise solutions and from clients new to SAP. In addition, SuccessFactors has made many updates to learning management and continues to deploy SAP Jam throughout its talent solution to up social utility. SuccessFactors also has introduced dynamic organization charting and has rolled out a new onboarding module. On the services side, SuccessFactors has dramatically grown the cloud support team IDC #US e 3

4 In March 2014, SAP announced the hiring of Mike Ettling as president, HR line of business. A seasoned executive with global experience in human capital and financial management, Ettling oversees SAP's entire HR business unit, which includes SAP SuccessFactors cloud solutions and SAP ERP Human Capital Management on-premise solutions. SAP SuccessFactors has established significant relationships with the cream of the crop in industry sales, consulting, and complementary business solutions through the acquisition by SAP and the SAP PartnerEdge partner program. By working together, SAP SuccessFactors and its partners develop, market, sell, and deliver a comprehensive suite of HCM software solutions. Recent developments include: The 2015 acquisition of European job posting supplier Multiposting to extend talent acquisition capabilities New user experience based on the SAPUI5/Fiori design framework Deepening of compensation modeling functionality Extended gamification in learning through an alliance with Bunchball Major movement to support continuous performance management Strengths SAP SuccessFactors continues to innovate across the talent portfolio to ensure all modules remain relevant and in step with the latest trends and technologies. The user experience has been unified across all modules with the adoption of the SAP Fiori framework. SAP SuccessFactors' strengths also include robust R&D, market momentum, depth of portfolio, vendor viability, and global reach. Specific to performance management, SAP SuccessFactors is adding continuous performance capabilities. Challenges Other end-to-end HCM vendors that focus today on the core HR complement of capabilities continue to add and deepen their talent functionality and may challenge SAP SuccessFactors at the module level. SAP is publicly traded on the NYSE: SAP. 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 2016 IDC #US e 4

5 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 performance are close among the vendors covered, as indicated by the clustering on both axes. However, those vendors with greater longevity in the performance 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 leaders, participants, and end users. Market weightings are based on user interviews, buyer surveys, and the input of a review board 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 workforce performance management function that serves as part of the integrated end-to-end market. While talent management is still a younger 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 IDC #US e 5

6 Background The market for talent management has evolved from one that largely focused on a single function, such as recruiting, to a more mature one 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. The market for performance management solutions is beginning to mature, and we have just recently begun to enjoy the benefits of the formal linking of performance with the other talent management functions. While there are standalone systems from vendors that offer only performance management, this IDC MarketScape looks at performance 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 solutions. Overview of Performance 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 performance management modules. Performance management applications are designed to automate the aggregation and delivery of information pertinent to the linking of job roles and the mission and goals of the organization. More specifically, the system allows users to automate the performance review process by using mechanisms such as training and key performance indicators (KPIs) to constantly track and monitor the progress of an individual employee, work team, and division. Key features include: Assessment of individual and organizational skill gaps that impede performance and job advancement, as in ability testing Continuous reviews and establishing milestones 360-degree evaluation and real-time feedback Performance appraisal automation Competency assessment and management Goal setting and tracking Employee surveys Alignment of workforce objectives to corporate objectives Development and career planning (There is also a market for deep standalone career planning.) Fast tracks for top performers Succession planning (There is also a market for deep standalone succession planning.) 2016 IDC #US e 6

7 Each of the talent functions is important in its own right, but bringing them together provides even greater value individually and in total. The potential benefits are too numerous to cover, but as examples, consider the integration of performance with other talent functions and the resulting use cases: With compensation to set and monitor salaries and incentives that are performance based With career and succession to help identify the path for the individual and identify future leaders With recruiting to provide it with an initial talent profile with which to seek the right candidates With and from recruiting to determine a quality-of-hire metric that is truly performance based LEARN MORE Related Research Market Analysis Perspective: Worldwide Integrated Talent Management, 2015 (IDC #258849, September 2015) Worldwide Human Capital Management Applications 2014 Vendor Shares: Total Market, Core HR, Workforce Management, Recruiting, Learning Management, Performance Management, and Compensation Management (IDC #257111, July 2015) Worldwide and U.S. Human Capital Management Applications Forecast (IDC #256701, June 2015) IDC MarketScape: Worldwide Performance Management in Integrated Talent Management 2015 Vendor Assessment (IDC #253854, January 2015) IDC MarketScape: Worldwide Integrated Talent Management 2014 Vendor Assessment (IDC #252213, October 2014) Synopsis This IDC study represents a vendor assessment of the performance 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, both in the short term and long term. "Some high-profile organizations like GE, Adobe, and Deloitte are beginning to rethink performance management and are eliminating performance ratings and annual reviews altogether. Instead, they have moved to a more continuous feedback process with hopes that it will yield better visibility into true performance and provide improved business outcomes," says Lisa Rowan, research vice president, HR, Talent, and Learning Strategies for IDC. "Reviews will not widely disappear overnight, but employers are beginning to look for better ways to more continually track and engage on performance." 2016 IDC #US e 7

8 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 2016 IDC. Reproduction is forbidden unless authorized. All rights reserved.