Each year, Gartner Inc. provides a talent management software comparison. In a comprehensive, 15-page report, the...
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2015 Gartner Magic Quadrant for Talent Management Suites ranks 12 vendors that offer an integrated set of applications, including workforce planning, recruiting and onboarding, performance appraisal, goals and learning management, succession and compensation management. A survey of users is taken in conjunction with the report.
Yvette Cameron, lead author of the report and research director at Gartner, based in Stamford, Conn., recently discussed the findings with SearchFinancialApplications.
The talent management software comparison includes a survey of 189 talent management suite users. The survey found 34% were using talent management modules from their core HR software vendor, an increase of 21% from 2014. Are users more interested in maybe forgoing some of the depth of talent management modules and opting for the full HCM [human capital management] suites?
Yvette Cameron: That growth represents a desire for a unified strategy. For many years, companies purchased individual talent applications to get the best functionality. Over time, they were not seeing the full value from those disparate systems because the reporting and integration was too difficult. The move to the talent management suites provided some added value, but organizations still struggled with the need for a single system of record, and greater support and visibility across their organizations. We are now seeing the convergence of talent management suites into broader HCM suites, which basically include core HR, plus talent management. This move to leverage talent management from a core HR vendor is, in part, driven by desires for better reporting and analytics, but also easier vendor management and unified user experience. We are seeing more customers buying solutions from their HCM suite providers, as those options are becoming more competitive with best-of-breed solutions.
In its talent management software comparison, the Magic Quadrant scores vendors on vision and execution, and places vendors in one of four quadrants, including leaders, challengers, niche companies and visionaries. Are the three leaders -- Cornerstone OnDemand, Oracle and SAP -- the same as last year?
Cameron: They are the same as last year, and we are definitely seeing consolidation around the leaders. They all improved on both vision and execution.
Users of Oracle raised issues with integration between the Taleo suite for recruitment and learning, and HCM modules, including performance management. Can you be more specific on this issue?
Cameron: In general, integration between applications is a challenge. The expectation is typically higher when you are using multiple applications from a single vendor. In Oracle's case, the expectation is that learning, recruiting and performance are all fully integrated. The reality is that Oracle acquired Taleo, which itself had acquired Learn.com. They have multiple technologies that are now aggregated into a comprehensive cloud suite, but still reflect lingering integration challenges. Oracle, like other vendors who have acquired solutions, has a very strong roadmap for bringing these solutions together -- more on a consolidated product line -- with greater points of integration or interoperability; the proof, of course, is in the execution. Integration is a common pain point, not just from Oracle customers, but from any customer who is working with applications with multiple technologies.
Similarly, SAP acquired SuccessFactors for cloud talent management in 2011. In your talent management software comparison, users cited issues with integration and also customer support. The report advises possible buyers of SuccessFactors to closely examine integration and ongoing support from SAP. Why is that?
Cameron: It is important for organizations to build in the right resources, as they are considering investments in any kind of HCM technology. The assumption is you buy SaaS [software as a service], the vendor manages it for you -- you don't need IT resources to nearly the extent you did with on-premises solutions. The truth is SaaS deployments require almost as many, if sometimes more, IT resources. Customer satisfaction is an overriding theme of the calls we have taken from clients of SAP's SuccessFactors. SuccessFactors itself has launched a comprehensive program over the last 12 months or so to focus on customer success. That kind of investment in improving customer success demonstrates that SAP is aware of customer support challenges that have been surfacing for quite a while, and we expect to begin seeing the results of that large investment soon.
Cornerstone OnDemand is the only other company in the leaders' quadrant with SAP and Oracle. Does Cornerstone integrate well with SAP and Oracle enterprise applications?
Cameron: If we look at the average satisfaction levels with integration between talent management suites and other solutions, it's been declining for the past three years. Our survey of reference customers of vendors in the Magic Quadrant bears this out. New this year, we started asking about integration within the talent management application itself. Overall, that came out higher than external integration satisfaction, as you would expect, but even that area scored less than 80% satisfaction. Specific to Cornerstone, I can't say its integrations with SAP or Oracle are any better or worse than other major talent management suite vendors.
Oracle has dubbed its new learning software as the YouTube of learning because of its focus on posting and sharing video tutorials. How do you view this new application?
Cameron: We are seeing a tremendous amount of investment in video, especially as it relates to learning. Look at the LinkedIn purchase this year of online learning website Lynda.com; it should have some interesting applications within recruiting use cases. A focus on video makes a lot of sense for a lot of reasons. Video is certainly the way we learn today. It's an easy way to capture and share knowledge as well. Video-based learning is very important for many organizations, coupled with integration into other talent management processes, such as recruiting, performance and career management.
In 2014, the market for talent management suite software was $3.4 billion and continues to grow at 17% annually. What is fueling the growth?
Yvette Cameronresearch director, Gartner
Cameron: The big, underlying driver is getting to better business outcomes. Companies recognize that greater workforce effectiveness results in greater customer success, which translates to improved revenues and earnings per share. Workforce effectiveness demands new ways of working. Today's talent management suites and modules increasingly incorporate the tools and support that reflect these new ways of working -- more collaboration, greater employee empowerment, improved decision support -- all of which foster better employee engagement.
Reporting is an area in which many survey respondents are not pleased. What are some reasons for this?
Cameron: The expectation is growing in the enterprise that we should be able to get to the information we need to make decisions when we need it. Yet, our applications are not necessarily designed for manager and user ease of access for reporting and insights. The applications are often designed toward the needs of an administrator who can parse out the information on a need-to-know basis.
Infor, Ultimate Software and Workday are not included in the talent management software comparison. Why is that?
Infor, Ultimate and Workday tend to sell their talent management solutions in conjunction with HR, as opposed to a Cornerstone or a PeopleFluent, which sell only talent management. The focus of the Magic Quadrant is to ensure we are talking about vendors who can fill that talent management gap, without requiring you to buy HR. We have announced we are going to be publishing a new Magic Quadrant for cloud HCM suites in early 2016.
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