BlogERP: Jim Holincheck's HCM Software Blog

A Look Back at the History of Gartner's Coverage of Talent Management Applications (Part 5)

When I started out writing this series of posts, I did not think it would be this long.  My apologies for the ramble.  In 2006, we made an important change in terms of coverage of Talent Management Applications.  We decided to change MarketScope for E-Recruitment Software into a Magic Quadrant.  We felt the market had matured to the extent it was warranted and some leaders had emerge.  We also introduced a new MarketScope for Retail Time and Labor Applications (the research was going on concurrently) which I worked on with Gale Daikoku from our Retail Industry Advisory service.  We did not do an update to the MarketScope for Employee Performance Management Software in 2006 (you can only do so many of these in a year).  In addition to those major research projects, that was probably the high point in terms of client inquiries.  Talent management was certainly at the top of the agenda.

In May 2007, we published an update to the "MarketScope for Employee Performance Management Software, 2007".  We expanded the scope to include Succession Management and Compensation Management in addition to Performance Management.  This scope change gave us research that evaluated vendors across all the major areas of Talent Management.  We had already been publishing research on the E-Learning market when combined with the EPM and E-Recruitment research, it gave us a pretty comprehensive view.

As we were doing all of this research, I became concerned.  In the Hype Cycle for Human Capital Management Software, 2007, I put EPM at the Peak of Inflated Expectations because I saw a lot of organizations buying talent management solutions and positioning them as strategic, but yet when you talked to them about what they had accomplished, it was largely automation of talent management processes.  So, in December 2007, I published "Unlocking the Strategic Value of Talent Management Application Investments".  I felt it was important that clients understand why integration was important and that analytics was the key to gaining strategic value from these applications.

That brings us almost up to date.  We recently published an update to the "Magic Quadrant for E-Recruitment Software".  We are about to kickoff the update to the MarketScope for Employee Performance Management Software.  I have the approval to make it a Magic Quadrant.  The market has matured enough.  This will be the first one that Thomas Otter and I collaborate on.  I look forward to his insights in this research.   We are also going to focus on case studies to help clients understand best practices in strategic use of talent management applications.

Finally, I get asked quite a bit about when we are going to evaluate vendors for the full suite.  A MarketScope or Magic Quadrant is used when there is a market.  Talent Management Application Suites are not quite there yet.  However, we have a new note type called Critical Capabilities to use to evaluate critical capabilities of vendors within and across markets.  Thomas, Carol Rozwell (our Learning analyst), and I are strongly considering collaborating on one for the suite.  Stay tuned. 

A Look Back at the History of Gartner's Coverage of Talent Management Applications (Part 4)

In Part 3, we left off discussing the first vendor evaluation for E-Recruitment.  We made some good calls including:

By 2008, market forces will cause 25 percent of the e-recruitment vendors to go out of business or be acquired (0.7 probability).

I do not know if it is actually 25% and not many went out of business, but many were acquired.  Our vendor evaluation was pretty good as well in retrospect (though some of our Positive and even Strong Positive vendors eventually were acquired).  At that point, we actually published a two for one.  We had a MarketScope focused on Salaried Hiring and one focused on Retail Hourly Hiring.  I think it was a good decision at the time.  However, as we entered 2005, things were definitely changing.  Oracle acquired PeopleSoft.  This event took a lot of time in terms of collaboration with other analysts and working with clients.  I also realized that we had not published a formal definition of the suite and really laid out the forces that were converging at the time to push toward the suite.  The concept of the suite was starting to gain some momentum so in June 2005 we published two notes: "Talent Management Application Suites Can Enhance Workforce Effectiveness" and "Talent Management Application Suites Emerge to Support Strategic HR Capabilities".   struggled at the time with how broad to define the emerging suite.  Should Talent Acquisition be part of the suite?  It was still disconnected in many ways in terms of the plans we heard from clients.  However, someone said something to me, I cannot remember who it was so please feel free to comment if it was you, that really resonated and that was that the interview process should be like someone's first performance evaluation.  That, along with the common competency foundation, convinced me that it should be part of the suite.  Workforce Planning was, and still is, to some extent an outlier.  More on that later.  We did pretty good on the prediction front:

By 2008, buying talent management applications from a TMAS vendor or an HRMS vendor will be customers' standard approach (0.7 probability).

We did a minor update to the MarketScope for E-Recruitment Software in July 2005.  We also did a full refresh of the MarketScope for Employee Performance Management Software in August 2005 (note the new standard name).  Again, we did fairly well, most are still doing quite well or have been acquired because they were a good strategic fit for larger vendor plans.  At that point, I needed to revisit the HRMS research.  I had already converted the Magic Quadrant for Large Enterprise HRMS to a MarketScope in November 2004.  However, I had not done an update the Magic Quadrant for US Midmarket HRMS since early 2004 so I hunkered down and did the update which published in January 2006.  I also published our foundation research on Workforce Planning and Analytics in October 2005 ("Exploit the Next Generation of Workforce Analytics to Manage Human Capital").  In Part 5, changes are afoot to the scope and format of the Talent Management research.

A Look Back at the History of Gartner's Coverage of Talent Management Applications (Part 3)

By the end of 2003, I knew that I needed to focus more on talent management application vendors.  So, I made the decision to get more detailed foundation research out on talent management applications so I put the HRMS research on the backburner for a while.  In 2004, Gartner introduced a new note type called a MarketScope to complement Magic Quadrants.  MarketScopes were intended to be used for early stage as well as late stage markets.  This was perfect for Employee Performance Management.  It was definitely at an early stage.  So,  dived in and started using the new note type.  The standards for it were still evolving (including titles) so I ended up including about four notes worth of material in the "Employee Performance Management Software MarketScope" published in June 2004.  The note is still worth a read today (subscription required) because the functional footprint and trends still largely hold true today.  As I look at the vendors we evaluated, it is interesting to see how much consolidation has happened (the following vendors we evaluated have since been acquired):

• Vurv acquired KnowledgePoint from CCH (now Vurv is about to be acquired by Taleo)
• Cezanne merged with HRM Software
• SilkRoad technology acquired Human Asset Technologies
• Vurv acquired InScope
• Beeline acquired Integrated Performance Systems
• Oracle acquired PeopleSoft and Siebel
• NICE acquired Performix

There were also acquisitions that had been done by the vendors we were evaluating.  Authoria had acquired Advanced Information Management (AIM).  Workscape had acquired Performaworks.  Anyway, I digress.  Most of the vendors that we rated Positive or Strong Positive continued to grow and mature.  We did not get it all right.  Performix struggled to find the right strategy (focus on related niches to call centers or go more general).  Workscape struggled with the Performaworks acquisition (eventually buiding their own solution).

This gave us a great starting point in our talent management coverage.  We followed that up with "MarketScope: E-Recruitment Sofware" in December 2004.  This time I realized that I should not put all everything in one note.  I published three other notes "Companies Need to Define E-Recruitment Software", "Choose an E-Recruitment SW Infrastructure Provider Carefully" and "E-Recruitment Software Market Trends, Q404".  I know these are not the best titles.  The first note provides more detail on what we include in the definition of E-Recruitment software (still largely true today).  The second note discussed the partnering landscape for solutions embedded in e-recruitment offerings like resume parsing, search, background checking, etc.  The third note is actually a decent title, but we have not updated it since (we discuss the trends in each MarketScope/MQ note) so the Q404 thing was not really necessary.  In Part 4, I will discuss how we made our way back to the suite concept.

A Look Back at the History of Gartner's Coverage of Talent Management Applications (Part 2)

You may have noticed in the quote in Part 1 that I did not envision the emergence of a talent management application suite in February 2003.   It took me a while to see the light.  We published the update to the Magic Quadrant for US Midmarket HRMS in July 2003.  So, I was able to take a little bit of a breather because I had done the updates that needed to be done.  I was still taking a lot of inquiries on niche talent management applications, especially recruiting and employee performance management.  There was also major M&A activity happening that proved a little distracting (PeopleSoft acquiring J.D. Edwards).  By November 2003, I finally came to the realization as I worked on my first Predicts note (an annual special report Gartner publishes) called "Predicts 2004: HCM and Financial Applications".  I made the following prediction:

HCM spending will be focused on talent management solutions in 2004.

A talent management suite supports key strategic workforce management activities, including recruitment, performance management, training, career development, succession planning and compensation. Two types of vendors provide talent management suite capabilities: ERP/human resource management system (HRMS) vendors and talent management suite vendors.

ERP/HRMS vendors don't have a specific offering called "talent management"; rather, they provide the requisite strategic capabilities in their HR modules (plus, in some cases, add-on modules) as well as functionality for administrative requirements (for example, health and safety, benefits administration).

Talent management suite vendors provide strategic workforce management capabilities without the administrative components. These vendors are converging on the talent management suite from several different directions: E-recruitment vendors are expanding into performance management; performance management vendors are expanding into career development/succession planning and compensation; and e-learning and compensation management vendors are expanding into performance management.

The talent management suite will continue to be more vision than reality in 2004. Some providers have the necessary breadth of modules, but only the requisite depth in one or two of them. We expect to see vendors increase their depth across the talent management suite through 2004, but it won't be until 2H05 that talent management suite providers will have enough depth across all modules to compete with best-of-breed niche vendors in each application area.

Talent Management Application Suites were not a great epiphany.  Client inquiries were pushing in that direction.  Vendors were already ahead of the game and building out suites.  I also did get the timing wrong.  Spending in 2004 was definitely moving to Talent Management.  However, I did miss it on the depth and breadth of suites vs. niche talent management applications.  We are entering the 2H08 and we are not there yet in terms of breadth and depth across the suite.  In Part 3, I will discuss how we changed our market coverage to included both HRMS and Talent Management Applications.

A Look Back at the History of Gartner's Coverage of Talent Management Applications (Part 1)

I was working on a new feature for the blog, a page that has a summary and links to my Gartner research, and I noticed the notes that we had done over the years about Talent Management.  I thought it might make an interesting series of posts to take you through the history of our coverage, where we got it right, where we got it wrong, and how our thinking has evolved over time.

I started at Gartner in May 2002.  The first task I was given, in no uncertain terms, was to update the Magic Quadrant for Large Enterprise HRMS.  I had never done one before, but I dived in and over the next five months completed that task.  However, during that time I was starting to get inquiries from clients related to competency management and a variety of niche applications.  I was getting more of these than I was getting around HRMS solutions.  So, as I started to work on an update to the Magic Quadrant for Midmarket HRMS (which I scaled back to US midmarket), I started to think about this trend.  I published "The Coming Resurgence of Competency Management" (subscription required) in February 2003.  It was really the first time I talked about what would become the core of what we know as a talent management application suite today.  Here is what I said:

Many enterprisewide competency initiatives bog down because of insufficient capabilities to maintain competency information. Client/server HRMS solutions that had integrated competency management were not distributable and were used only by human resources professionals. New point solutions (as well as solutions from traditional enterprise resource planning [ERP] II/HRMS vendors) that leverage Web technology focus on recruitment, performance management, career development and compensation management, and extend these services to employees and line managers as well as human resources. By pushing the ownership of competency data out to employees, team leaders and project managers, enterprises are much more likely to be able to effectively use (and thus more compelled to maintain) competency information.

It was really competencies that put me on the trail because it was the common element that tied these applications together.  Competencies certainly remain an important part of the discussion (I got that pretty right).  In Part 2, I will discuss how we finally realized that the suite concept was emerging.

links for 2008-06-21

• Why multi-tenancy matters | Software as Services | ZDNet.com
  An interesting take on different styles of SaaS architectures.
  (tags: SaaS)

My Upcoming Gartner HCM Research and More

I am working on a number of research notes which will be published soon including:

• Magic Quadrant for E-Recruitment Software, 2008 (hopefully it will be published tomorrow)
• Hype Cycle for Human Capital Management Software, 2008 (Thomas Otter, our not-so-new HCM analyst, is leading the charge on this, but I have a lot of contributions)
• SOA in HCM (this is actually two notes -- one note on the impact of SOA on HCM applications and a second note comparing how Lawson, SAP, and Workday have approached using SOA)
• SaaS in HCM ( This note discusses the impact of SaaS across different HCM market segments and how customers should think about buying solutions)

It is important to note that Thomas has done some outstanding work already including (subscription required):

• Case Study: Dow's Formula for Social Software

Dow deployed a social networking platform to help proactively address the challenges of an aging workforce and a shortage of engineering talent. Participation levels are very high, and business benefits are already evident three months after the launch.

• Testing Times for HR Systems and EU Data Protection Law

Testing is vital for stable, productive HR and payroll systems; however, live personal data in test environments is subject to European Union data protection laws. CIOs, privacy officers and HR should ensure that HR testing is integrated into IT governance models and that compliance is enforced.

My Recent Gartner HCM Research

Below is a list of links to my recent Gartner research (subscription may be required):

CUE Conference 2008: Lawson Continues Emphasis on Target Vertical Markets

At the 2008 Lawson CUE Conference, the theme of vertical specialization was continued from the 2007 conference. Also, Lawson introduced new products, acquired and developed internally, that it hopes will differentiate it from its competitors.

CUE Conference 2008: Lawson Unveils New Products

At the 2008 Lawson CUE Conference, Lawson introduced new products, acquired and developed internally, that it hopes will differentiate it from its competitors.

Taleo-Vurv Deal Part of Talent Management Market Consolidation

Taleo's planned acquisition of Vurv Technology will strengthen its leadership in the e-recruitment market, but will not have a short-term impact on its position in the broader talent management software market.

Cool Vendors for Human Capital Management Software, 2008

Cool vendors in human capital management software for 2008 focus on emerging HCM trends of workforce analytics, as well the broader social networking trend in HCM context.

MarketScope for Large Enterprise HRMS, 2008

The market for human resource management system solutions is mature, but large-enterprise customer expectations about solution capabilities continue to grow, pushing vendors to keep up.

The most important note I published though was back in December 2007.  So, I will link also link to it here (even though it is not that recent).

Unlocking the Strategic Value From Talent Management Application Investments

Talent management applications are "hot." However, most customers are just automating manual processes, not leveraging the technology to enable more-strategic human capital management. We discuss how HR and HRIT professionals can unlock the strategic value from these investments.

Doing My Day Job

It has been quite a while since I posted to the blog.  I apologize.  Life sometimes gets in the way.  Changes in my day job have taken away some of the time spent blogging (I am what is called a player/coach -- I manage a group of analysts as well as still doing the job of an analyst).  I also have been working on a lot of research.  I will publish separate posts on what recently was published and what will be coming soon.