IDC MarketScape: Worldwide Integrated Talent Management 2018 Vendor Assessment

Transcription

1 IDC MarketScape IDC MarketScape: Worldwide 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 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 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 integrated talent management market 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: Pricing for a single module stayed steady in 2015 and 2016 but went down slightly in Conversely, the price per employee per year for three modules went up in 2017, while it had been flat year over year in 2015 and Pricing for a single application is apparently going down, while pricing per module within a suite is on the rise. IDC opines that individual module sales are highly competitive with suite vendors going up against best-of-breed providers, so suite vendors are paring pricing to compete. Suite vendors are successfully selling bundles of three or more modules in a single deal and, as a result, are freer to up the component module costs. According to IDC's 2018 Survey of HR Executives, overall client perception dipped in this category following steady increases in 2016 and Client perceptions of customer service were decent overall, but strong competition in both functionality and pricing leaves many vulnerable in this area. Interestingly, some of the highest ratings among clients went to vendors' plans to develop and deploy capabilities that meet clients' needs across all five modules of integrated talent management. Considering the size of marketing budgets these days, this is perhaps to be expected, but it should also be noted that the rate of innovation has increased significantly and many vendors shipped major enhancements to their portfolios in the past year. Rapid innovation in areas like learning and performance management has created intense competition, with vendors shipping new capabilities rapidly. But as many vendors are targeting these same capabilities, the most differentiated offerings go beyond deep functionality in one or two modules. For many, even achieving necessary depth in each module was a challenge, with customer ratings on the low side. The value of leveraging a fully integrated suite across a modernized user experience (UX) remains of utmost importance to buyers, however, and vendors that are investing heavily in both are being noticed by clients. Notable areas of differentiation among those vendors identified as Leaders in this IDC MarketScape document extend beyond specific product features and functionality though innovation plans for the next months were impressive. In addition, those vendors laser focused on the unique needs of specific verticals continue to win new logos and achieve greater results with clients in these areas. But just as important is a vendor's ability to support clients beyond implementation through client success strategies and strong partnerships to drive adoption and enable transformation in talent management. Among those vendors toeing the line between Major Players and Contenders, this was a consistent challenge IDC #US e 2

3 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 500,000 employees/users live on a combination of two or more of the major talent management functions of recruiting, learning, performance management, and compensation. A substantial portion of the 500,000 employees/users must be in North America. Talent modules must be available for procurement on an individual basis, and each module must be able to be deployed as a standalone solution. 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 in respect to both its capabilities and its strategies human resources (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. Take the entire integrated technology stack into consideration. 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 the most 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 IDC #US e 3

4 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 for worldwide 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. It 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. 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 its 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. A solution that provides 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 that 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) 2018 IDC #US e 4

5 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 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. 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 and championing digital transformation in HR and talent is a likely avenue. Similar to its primary competitors, there is a strong case for continuing investments in SAP SuccessFactors talent acquisition and new hire onboarding capabilities an area where many suite vendors are increasingly vulnerable to best-of-breed solutions. 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 the company 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 IDC #US e 5

6 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. The integrated talent management software market has reached the point of maturity where the vast majority of vendors now offer all of the major talent management modules. A growing number of vendors are staking out leadership positions, with many more challenging from the IDC MarketScape Major Player category. Whereas a bifurcation between the Leaders and close challengers and the rest of the field has existed in the past, there have been notable changes among both established vendors and relative newcomers. The ability to gain share in the fairly crowded market remains important, but usability, scalability, and deep functionality in critical modules are growing in importance in the cloud. The vendors covered in this analysis come from varied backgrounds: Some come to the talent management market from a talent acquisition perspective, some from a learning management market, and some from the overall HRIS or ERP market. There are also those vendors that began their market entry with performance management or compensation. No one background dominates another. As the market has matured from a buyer perspective, the offerings continue to mature with ever-narrowing market differentiation. Vendors are beginning to set themselves apart less on the functional offering and more in the areas of mobile support, client success strategies, and advanced analytics capabilities. 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 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. 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 onboarding, 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 serving all of the talent management functions mentioned previously through a single integrated end-to-end offering. 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 IDC #US e 6

7 The long-standing business imperative to align talent strategies to business priorities and objectives has supported continued growth and innovation in the integrated talent management software market. To meet high demand for solutions that can support major change initiatives among companies big and small, the integrated talent management market focuses on bringing all of the major talent management functions together on a single technology platform with a common shared database and underlying architecture. In the absence of a single solution, employers often don't exchange data across the various talent functions at all or do so manually. As a result, people processes like learning and recruiting are often poorly integrated (if at all) and organizations lack insight into the extended employee experience. HR leaders and line-of-business (LOB) managers are frustrated by a lack of information and the amount of heavy lifting required to drive necessary changes across HCM processes and strategies to better support business priorities. For the purposes of this study, the talent functions considered integral to a single integrated solution are: Talent acquisition. Those capabilities needed to manage and promote job openings and attract and engage potential candidates for those openings, both internal and external Employee performance management. Management of the goals and objectives and skills of the position to provide ongoing feedback to the employee on progress Learning and development. Assessment of skills gaps, prescription of learning and development activities to fill gaps, and delivery of learning content Compensation management. Management of salary planning and tools to ensure equitable policies are applied (In this study, deep incentive-based compensation used largely for sales is not in scope.) Career and succession planning. Sometimes thought of as internal recruiting on the succession side at the initiation of the employer and on the career side at the initiation of the employee (Both are designed to have the right people ready to ascend from within.) Underpinning these functions is competency management that offers the common language needed to describe talent and the ability to apply assessments to gauge readiness and to assist in the recruiting process. 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. 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 IDC #US e 7

8 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. It is important to note that this study focuses on integration and the intersection points and not on any one talent function. 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 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, 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.