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

Transcription

1 IDC MarketScape IDC MarketScape: Worldwide Performance 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 Performance 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 Performance 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 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, in both the short term and the long term. Key findings include: Performance management continues to be an area of continuous change. Talent leaders are constantly cooking up new strategies for driving engagement and improving productivity and modernizing performance management has emerged as one of the leading use cases for digital transformation in human resources (HR). The one constant across all the myriad methods utilized today is the critical role technology plays in an effective strategy. To compete for the business of this forward-thinking buyer, vendors in this category are investing heavily in innovation and product. But for quite a few, performance solutions are limited when it comes to supporting change management and adoption, and customer service is lacking in general. Employee engagement remains top of mind for talent leaders and executives alike. Challenges persist, however, as many wrestle with defining, measuring, and quantifying the impact of engagement. Best-of-breed solutions for modern performance management are increasingly popular, and even vendors in employee wellness or rewards and recognition are developing functionality that encroaches on the performance management territory. It will be important for integrated talent management vendors to differentiate with deeper functionality than ever before or risk losing clients to a solution that's ahead in innovation cycles. 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, 2017, a substantial number of which are in North America. The module must be part of a broader talent management suite. The performance 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, while others are known for working closely with clients to develop bespoke solutions to meet complex needs. All vendors 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 in respect to both its capabilities and its 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. From ADP to Halogen, an uptick in targeted solutions for companies with <5,000 employees is good news for small and midsize businesses (SMBs). Other vendors continue to do well within specific industry verticals, such as PageUp People in higher education, PeopleFluent in healthcare and manufacturing, and Oracle in extended enterprise. Take the entire integrated technology stack into consideration. While the strongest business cases for investing in performance management systems are rooted in addressing specific issues and quick time to value, differentiation among vendors in this category in the area of performance management went one step further than the depth of this module. That's because the power of performance when leveraged together with a fully integrated software suite is not to be understated. Some vendors are making substantial investments in learning; others have strong recruiting and onboarding and all are deepening connections between these systems and performance. Be sure to evaluate how vendors are leveraging investments across their extended platform solution set to maximize value for all of your stakeholders. Identify your innovation drivers. Is your organization undergoing extensive digital transformation and in need of reskilling and upskilling across a diverse and distributed workforce? Are you growing rapidly and in need of robust recruiting and onboarding systems? Are you 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 your organization and to your talent management strategies 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 performance 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. It provides social capabilities throughout its suite, and deeply within talent management 2018 IDC #US e 3

4 solutions. SAP SuccessFactors also delivers workforce analytics, workforce planning, and core HR (Employee Central) including payroll, and time and attendance. 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. It 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 the company's partners, SAP SuccessFactors delivers comprehensive solutions to today's talent management challenges. In July 2017, SAP announced Greg Tomb as president of 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 An intuitive, point-and-click, and drag-and-drop experience for recruiting teams to easily build and maintain career sites Learning Marketplace A 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, which recommends "good fit" mentor-mentee relationships based on deep talent analytics Expanded analytics More widely used within talent solutions to make recommendations (see the Mentoring bullet point) and provide guidance via Insight Panels (Plus, SAP SuccessFactors Workforce Analytics is now integrated SAP Analytics Cloud and the SAP Digital Boardroom.) Head count 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 That include 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 in the area of performance management and is making significant investments in user experience to drive more adoption and deepen value within its client 2018 IDC #US e 4

5 base. The breadth of SuccessFactors' premiere module and the power of the extended SAP SuccessFactors suite are a compelling combination, and clients are realizing the extended capabilities of the SAP Cloud with its industry-leading talent analytics. Clients are well satisfied with the product road map, including SAP's compelling work as part of the Business Beyond Bias initiative. Challenges SAP SuccessFactors may lead the pack of suite vendors when it comes to performance management capabilities, but best-of-breed solutions are creating new competition. SAP SuccessFactors needs to continue to deepen capabilities to fend off established players and newcomers alike and championing talent in the digital enterprise is a likely avenue, supported by the power of a strong performance management in an integrated suite. Consider SAP SuccessFactors When For HR professionals under pressure to drive meaningful, tangible change in the employee experience including new hire onboarding and career management finding the right partner to power these initiatives is critical. SAP SuccessFactors' legacy of pushing the envelope in performance management coupled with new and visionary leadership makes them 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. 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 market leaders, participants, and end users. Market weightings are based on user 2018 IDC #US e 5

6 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 2018, of 500 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 assessment focuses on the market for software and services solutions supporting the performance management function that serves as part of the integrated end-to-end talent management market. The market for talent management has matured rapidly in the past several years, with greater market penetration led by the move to the cloud. It is a market that has gained and continues to gain a lot of attention as organizations go big in digital transformation and validates the critical importance of talent in the digital enterprise. Subsequent sections of this document offer definitions and the characteristics IDC identifies as important for success in this market. 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 fully mature, although many organizations are still working to fully integrate performance management processes with the other talent management functions. While there are standalone systems from vendors that offer only performance management, this IDC MarketScape document looks at performance management from vendors offering a broader 2018 IDC #US e 6

7 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.) Each of the talent functions is important in its own right, but bringing them together provides even greater value to each and in total. The potential benefits are too numerous to cover, but as examples, consider the integration of performance management and other talent functions and the resulting capabilities: Performance data can be utilized within talent acquisition in the form of validated success profile built from those excelling in the position with which recruiters can develop strategies to attract and source the right candidate personas. Performance data combined with recruiting data can help employers build a quantifiable quality of hire metric that is truly performance based and specific to job role, category, or division IDC #US e 7

8 Performance data can be leveraged within learning to prescribe remediation for areas of weakness and also to highlight and grow on strengths, resulting in more meaningful (and valuable) development plans. Performance data cross-referenced with compensation data helps set and monitor salaries and incentives that are performance based and can support pay equity. Performance data plays a critical role in career and succession strategies by identifying the path for the individual contributor interested in further specializing and identifying future leaders IDC #US e 8

9 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 integrated talent management market through the IDC MarketScape model. This assessment discusses both quantitative and qualitative characteristics that explain success in this market. This IDC MarketScape document covers a variety of vendors participating in the integrated talent management market. 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 for success in the market, both in 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 9

10 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.