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I attended SuccessConnect (Twitter: #sconnect), the annual SuccessFactors conference, to hear the latest from this talent management applications company. A lot has changed for the formerly independent company since it acquired Plateau less than a year ago and Jobs2Web. In turn, earlier this year SAP acquired SuccessFactors to expand its cloud computing business. Its recently outlined expansion as part of SAP’s overall cloud computing strategy is beginning to take shape.

SuccessFactors is expanding its talent management applications to a larger portfolio of human capital management applications. First, SuccessFactors announced the availability of its Professional Edition, which is focused on providing performance and talent management to small and midsize businesses. It handles employee profiles, goal management, performance management and 360-degree reviews, and includes Jam, the company’s social collaborative environment. Organizations that want to add compensation, recruiting or a more advanced edition of Jam can rent them as well.

Second, SuccessFactors announced it will adopt SAP HANA as the in-memory computing technology for big data to underpin its workforce analytics and planning technologies later this year. HANA should significantly enhance the computing performance of its offering while appearing mostly transparent to organizations. In addition, SuccessFactors has introduced new capabilities to help users develop reports and metrics that can be accessed from not only desktops but also tablets such as Apple’s iPad. SuccessFactors’ product is built on a robust library of workforce content including prebuilt analytics and metrics. Our benchmark research on workforce analytics found that analysts spend two-thirds of their analytic process time on data-related tasks, which includes time wasted using spreadsheets; this product significantly reduces both liabilities. Our recent research on human capital management found that employee satisfaction and engagement is the most important metric in 69 percent of organizations, and reducing frustrations like this can contribute to improving that.

Last is a series of introductions of applications relating to the use of social collaboration and mobile technologies; this expands the reach and value of SuccessFactors to the broader workforce. BizX Mobile Touchbase is a task- and activity-centric application to help users keep track of issues before meetings scheduled to address them. It runs on BlackBerry, Android and iOS devices and can interoperate with other calendaring systems. It can run alongside other BizX mobile technologies such as Jam for social collaboration. SuccessFactors has also released a mobile feature for knowing who is in a meeting no matter who they work for by integrating a social connector to look up individuals in LinkedIn. It supports informal performance management activities, including team overviews and feedback requests to help managers conducting reviews. This feature addresses a need found in our benchmark research on performance management for talent management – more than one-third of organizations see inadequate systems as the top barrier to managing performance. SuccessFactors also advanced its learning offering, the expansion of social and mobile support of expanding the knowledge sharing which our benchmark on social collaboration and human capital management found as the top goal to help organizations advance in 49 percent of organizations.

Beyond these products, which are available today, SuccessFactors unveiled Employee Central, a new cloud-based service for human capital management scheduled for release this summer. It stores employee records and makes them available across SuccessFactors applications, but more importantly it helps managers and employees get simpler access to self-service payroll, vacation and time-off information. This could answer the need of 89 percent of organizations in our research that said existing environments are too complex. Employee Central is a user-centric, configurable application that can provide quick access to a range of human capital information. I was impressed by the simple presentation of workforce metrics in its new interface. In addition, the application is accessible on smartphones and tablets. I think Employee Central has the potential to change the way businesses think about workforce applications. A critical advancement for SuccessFactors is the migration of SAP on-premises payroll technology to now be available in the cloud computing model and part of Employee Central. For example, organizations are always looking for ways to make payroll processing more efficient, since it is one of their largest ongoing costs.

SuccessFactors also demonstrated its focus on recruiting to help attract, engage and select talent for interviews and eventually for hire. It is bringing features from its Jobs2Web acquisition together with SuccessFactors Recruit to promote jobs not only on companies’ websites but also on job boards and social media channels. The software offers many methods to search for candidates, from keywords to location across all channels, including social media, and gain access to new talent pools; our benchmark on social media and recruiting found integration with LinkedIn was critical to more than half of organizations.

SuccessFactors is addressing the broad purpose of human capital management, which is to attract, engage and retain talent to meet business objectives. The company is advancing in a highly competitive market for next-generation applications focused on people and workforces. It has new releases coming across its applications portfolio, including compensation and learning, which I will cover later. But SuccessFactors continues to work with its partners to complement its offering. For example Workforce Software that I have assessed helps manage the tasks related to non-exempt employees that have specific hourly and scheduling related needs. With the transition into SAP behind it, SuccessFactors has the process of integrating its applications with SAP’s well under way. Its challenge is to keep up the pace of product development while educating potential new customers and making successful new deployments across the world. Its technology advances are well worth examining as organizations assess their existing deployments and evaluate new ones.

Regards,

Mark Smith – CEO & Chief Research Officer

Acquisitions and new product releases continue to make the market for human capital management a hotbed of activity, as organizations attempt to fully utilize and increase the value of their workforces as I have outlined in my research agenda. ADP, with more than $10 billion in revenues and more than 570,000 customers, is aiming for the top spot in this market.

ADP plans to grow its current human resources-centric outsourcing business and expand its software and services for human capital management (HCM) directly to organizations globally. It has three major products that target niches from small to midsize businesses to the largest global organizations. At the low end, ADP Workforce Now, launched in 2009, provides a collection of HR, benefits, payroll and time management capabilities to more than 24,000 clients. For midsize businesses, an application suite called ADP Vantage HCM is in pilot deployment and estimated for release in mid-2012. On the high end, through a partnership with SAP, ADP GlobalView handles transactions in 81 countries for more than 100 customers with 1 million employees. ADP’s latest announcement, touts having an integrated end-to-end application platform for talent management for all sizes of business. ADP also continues to offer other applications directly through its partnerships, such as one with Cornerstone for its talent management suite and another with Kronos for workforce management. (To confuse things, ADP just announced an extension to its reselling of Cornerstone OnDemand, which directly competes with the soon-to-be-released ADP Vantage HCM.)

On another front ADP purchased a new learning management system (LMS) to expand into this market. From my review it appears to be a good stand-alone foundation to build on and will need further integration with performance management and analytics and a better interface for users to collaborate and interact with others in the organization.

ADP also has expanded its ADP Mobile, adding to existing employee self-service capabilities such as paycheck, benefits, time and attendance, absence and retirement, new capabilities including inbox, work calendaring and pay-card management. I reviewed its mobile capabilities on the Apple iPhone and found it simple to use and covering key employee-level needs for any size of organization.

ADP Vantage HCM provides talent acquisition, compensation, performance and succession, and is built on a platform that is strong on configurability, utilizing workflow and a rules-based approach. At its foundation is a jobs library that stores information and profiles about individuals who have specific jobs and competencies. ADP has overcome the most impactful barrier to compensation, which is integration with the rest of the talent management suite, according to 66 percent of organizations in our total compensation management benchmark research. However, it needs to make usability a higher priority for employees and managers across its applications; in this area the software needs improvement, and usability is the number-one evaluation criteria for products in HCM according to our research. But ADP has made many tasks easier to use; for instance, it presents the alignment of goals for an individual in one screen for review. This helps align the workforce to business goals, which is the top benefit of a performance management investment according to 81 percent of organizations in our performance management for talent management benchmark research. It has also expanded in its support for competencies and salary data for benchmarking, and is starting to provide content for its newly released LMS.

Looking elsewhere, we see that ADP still could improve its recruiting and applicant tracking systems as part of its application suite. Today, with its talent acquisition capabilities, it can manage requisitions and interviews, handle onboarding by posting positions to specific job boards, get resumes, post applicants into the system and do background checks. ADP also acquired a recruiting processing outsourcing (RPO) company called The RightThing that has helped many large organizations with outsourced recruiting. It uses a candidate relationship management technology called SourcePoint that has the ability to identify and source candidates from job boards and social sites such as Spoke and ZoomInfo. But ADP has not integrated its recruiting technologies with the Vantage HCM suite, and that should be a priority. According to our benchmark in social media and recruiting, half of organizations plan to address candidate integration from sites like LinkedIn and Facebook to identify new talent pools. HR and recruiting organizations expect these capabilities from applicant tracking systems.

Another area where ADP will need to enhance Vantage HCM is workforce analytics; the current offering needs significant improvement in usability and functionality. ADP demonstrated a new technology offering that was demonstrated on a table that presents information in a logical and easy-to-read manner, with access to micro-analytic visualization for details on metrics. HR professionals expect analytics to be simple to use, according to 89 percent of organizations in our workforce analytics benchmark research. ADP also has been investing in search technology as an enabling feature to its applications, letting users search nouns, verbs and actions within the applications and information. One area that it has not addressed is the social collaboration that helps address the needs of employee engagement for retaining talent that our benchmark research finds is a new priority in business.

ADP wants to become the largest provider of cloud-based enterprise software, adding to its current 250,000 software-as-a-service (SaaS) customers with an estimated 18 million employees using its products. The company is building on its strengths in payroll and benefits and expanding its HCM portfolio. It faces some tough choices about continuing or ending partnerships with companies it is now competing against. Future releases of workforce analytics, support for tablets and improved usability of the Vantage HCM suite will help ADP be even more competitive in the market.

Regards,

Mark Smith – CEO & Chief Research Officer

Mark Smith – Twitter

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