Talent Management Systems: Market Update
The talent management systems market continues to grow and consolidate at the same time. With a busy summer and lots of time spent on Learning Culture and other topics, I have not had time to talk about the talent management software space. (I’m attaching our recently introduced “New” Talent Management Framework to help you understand this whole space, you can download the introduction here.)
Fig 1: Bersin & Associates High-Impact Talent Management Framework®
Here are some important updates (much more to come in the next few months):
- ADP announced its acquisition of Workscape.
This is a significant move, demonstrating how talent management software has now become truly mainstream. Workscape will become one of ADP’s strategic platforms for its National Accounts organization (organizations with 1,000+ employees) – allowing the company to offer a more complete compensation platform for these companies. Workscape was the clear leader in enterprise compensation software (with IBM, Cisco, and other major companies as customers), and also has built a performance and succession management solution. ADP already resells CornerstoneOnDemand to this market (for performance management and learning), and we would not be surprised to see the Cornerstone relationship phase out over time. This move clearly shows how hot the talent management market has become, and it does not bode well for smaller, less well-funded players.
- Taleo introduces its Talent Intelligence Strategy.
Taleo introduced its new Talent Intelligence strategy. This small and probably overlooked press release talks about how companies know more about their PC’s and physical assets than they do about their people. (There is a lot of truth to this – most large companies have a hard time even coming up with an accurate count of all their employees at a given time.) This strategy is the beginning of Taleo’s introduction of a very exciting set of tools for data warehousing and analytics. I wont preview the Taleo announcement, but this capability will give Taleo customers another reason to move all their talent management to the Taleo infrastructure.
- Saba introduces Saba Live.
While I’m not crazy about the name (I really liked “Saba Social,” the earlier name, better), this product offering is really revolutionary.
Years ago when Saba acquired Centra, I was one of the lone analysts talking about how Saba saw the tremendous potential for collaborative corporate learning in a people-management platform. This month this has all come to reality – and Saba Live is truly a breakthrough system. Over the last 3+ years, Saba has integrated the live virtual classroom capability of Centra (an excellent alternative to Webex, GotoMeeting, etc. with far better virtual classroom features) with Saba’s new collaborative platform. Saba now has by far the most complete and modern collaborative environment on the market. This new solution truly integrates all the social learning, social networking, and collaboration features you could think of – all into the Saba People Management platform.
Fig 2: Screen Shot of Saba Live
This integration means, of course, that every interaction your employees have can leverage the collaboration tools from Saba – so you can integrate formal and informal learning, ad-hoc collaboration, expertise directory, activity streaming, presence awareness, idea factories, knowledge databases, technical wikis, and any other type of corporate social networking into a single system. And since this software is integrated with the LMS and performance management system, any formal and informal activity can easily be integrated into formal processes like certification, training, performance appraisals, project planning, etc.
Think about the fact that Jive, the biggest independent player in this market, now sells its standalone collaborative platform for hundreds of thousands of dollars a company. If Saba can simply market this offering well, the company can now see a significant increase in revenue and clear differentiation in this market. Saba also just announced its 2010 year-end results (the company is on a mid-year calendar), and for the first time in many years, the company grew significantly, was GAAP and cash-flow positive, and has started to penetrate mid-market accounts. By the way, Saba also attracted Jim Lundy, Gartner’s premier corporate collaboration analyst, to join the company – another very bullish indicator that good times are ahead for Saba.
- SuccessFactors Reported A Reasonable but Slowing Quarter.
SuccessFactors reported another growth quarter, although its growth rate is slowing. Total deferred revenue is up around 28% from the prior year but up only 3% from the prior quarter. This is still good growth for any software company in this environment, but clearly shows a slowdown for SuccessFactors. We’ve actually talked with several customers this last quarter who had SuccessFactors and then decided not to continue the license, primarily because there is now such a strong push to consolidate enterprise software to fewer primary vendors. With Taleo, Oracle, SAP, Workday, ADP, Lawson, ADP, Softscape, Saba, and Silkroad all offering “more modules” than SuccessFactors, many companies are simply saying “we need fewer vendors around here.”
I have been surprised how quickly the economic downturn has forced this to happen – in our upcoming Talent Management Customer Satisfaction reasearch (come to the HR Technology Conference for the debut (session SV3)!!) we found that 14% of all respondents are planning on using their ERP software for talent management – almost a 40% increase from last year. It’s all about consolidating vendors and simplifying our lives – and right now the core talent management modules are becoming more and more integrated every day. SuccessFactors is still an amazing company – and their acquisition of Infohrm gives them a fantastic HR data warehousing product – which I believe will be positioned head to head against Taleo’s Talent Intelligence solution. I spent almost 7 years of my professional career in the data warehousing market, so I look forward to giving you some details on how these various offerings compare.
- Bersin & Associates Research on Customer Satisfaction is Coming.
Finally let me make one small plug. We are in the middle of collecting and analyzing data on customer satisfaction with talent management systems. This research will be launched at the HR Technology Conference from September 29-October 1 in Chicago. If you are a user, buyer, or administer of any HR software, I really want to encourage you to take this survey. All participants will receive both a copy of last year’s results as well as a copy of this year’s findings.
One of our recent readers told me that the felt the 2009 Customer Satisfaction report was one of the most interesting reports on HR software they had ever read! You can get your hands on it by taking this survey. (Click here.)
As always, comments and feedback welcome.