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We have just released our 2012 Value Index for Total Compensation Management (TCM), in which we evaluate the competency and maturity of vendors and products. Our firm has been researching this category for many years, and our latest benchmark research in total compensation management found some improvement among applications in a field where many organizations still use outdated applications to manage an area with large financial and human capital impacts.

I am excited to bring this research to market again this year. No other research firm performs this level of analysis or follows it up on a regular basis. The Ventana Research methodology utilizes a request for proposal and assessment approach, and each value index takes six months to complete; unlike other analyst firms, we look at the product details that have the most importance to successful adoption and use. In the process we identify best and worst practices that further refine how we assess technology vendors in this category.

Our research, including this Value Index on Total Compensation Management, looks at the complete range of aspects of compensation, from types of pay and benefits to the processes required to manage them and communicate with workers. We examine role-based requirements for an organization, as well as integration with performance and talent management. We look closely at the key product areas – usability, reliability, manageability, adaptability and capability – and also the customer assurance areas of validation and TCO/ROI.

A lot has changed among TCM suppliers in the past year. For instance, Plateau, which we rated Hot in 2011, was acquired by SuccessFactors, which in turn was acquired by SAP. Now SAP is focused on using SuccessFactors offering and placing the product investments on this offering. Taleo was acquired by Oracle and its product was put aside in favor of the newer Oracle Fusion Compensation Management.

This year we found many talent management vendors claiming to manage compensation, but some provide only a place to enter current compensation data for use in performance reviews or provide limited capabilities. These vendors lack a total compensation management approach that can be used across all roles – administrator, management, manager and employee and support the processes, communicated and integration required for meeting these needs and support of talent management.

Our Value Index methodology assesses vendors across the seven categories noted above, each weighted according to its priority to buyers, and sums the results to 100 percent for scoring purposes. We placed a heavier emphasis this year on usability, reliability and manageability, which organizations indicated in our benchmark research are increasingly higher priorities. You can read the details on our methodology and process in the full TCM Value Index report.

Our analysis in the 2012 Value Index found six vendors that provide robust offerings. All six are rated Hot, which is the highest value level and demonstrates maturity of offerings. SuccessFactors ranks at the top, closely followed by Peoplefluent, then SumTotal Systems, Oracle, Excentive and ADP. We noted in our analysis that SuccessFactors and Peoplefluent showed rapid product advancements every quarter, and their focus on usability, manageability and reliability helped raise them above last year’s ratings. Oracle is a vendor to watch, with its latest release of Oracle Fusion Human Capital Management, which includes compensation and is available both on-premises and in the public cloud. New to the Value Index is Excentive, which is dedicated exclusively to total compensation management.

We take a lot of pride in our Value Index, and we believe it is cool to be a Hot vendor. The competitive market for these applications comprises a very mature set of products. Congratulations to the vendors that survived our detailed assessment processes and granular analysis, which represent how organizations assess and select vendors. If you want some further information, you can download the executive summary. We look forward to offering continued guidance to buyers on this critical application category for HR, finance and operations professionals who need to engage and retain employees by taking a comprehensive approach to compensation management and applications.

Regards,

Mark Smith

CEO & Chief Research Officer

Businesses’ strategic imperative to optimize human capital is creating significant energy in the market for applications used to attract, optimize and retain talent. Amid all the recent acquisitions and changes that I have been writing about in this field, SumTotal Systems seems to get less attention than its size and the reach of its business merit. The company has more than 45 million users, with more than 15 million of them operating in a cloud computing environment spanning more than 3,500 customer companies worldwide. Its investments in 2011 in mobile, social learning and workforce analytics software have become part of its HCM portfolio, as have its acquisitions of CyberShift to expand into workforce management and Accero for payroll, benefits and analytic content. The company has done a good job of extending its portfolio while improving the user experience for its customers.

SumTotal last month unveiled the 2012 release of its HCM application suite. Building on the factors I discussed in my analysis from late in 2011 at its analyst summit, the company has fulfilled its promise to expand and integrate its suite of applications to support the growing demand for a unified suite of HCM applications from a single vendor. One of SumTotal’s unique differences is that it offers HRMS, talent management and workforce management applications that can be used by a range of employees, from top executives to front-line hourly workers. It also offers payroll, benefits and expense management. The software’s point of interface is TalentPortal, which provides a role-based interface and single sign-on to the underlying applications in the TalentHub, which integrates common services and data across applications. SumTotal should communicate more about these two applications, since they are key differentiators in its unification of applications and the manageability of its underlying platform.

Another strong area for SumTotal Systems is its learning management system (LMS). The company has made it simpler to register and review job applicants. It has significant improvements for administrators in the areas of configuration, certification, reporting and overall design. SumTotal also has integrated  its acquired workforce management software into the overall suite and platform, and can present the capabilities of its talent management and learning management offerings within a common user experience. Improvements in the management of absence and leave give users the ability to build schedules by selecting the right worker with specific skills for specific shifts. All these improvements in the user experience and usability are critical; usability is the number-one evaluation criteria for applications in business today, according to our benchmark research across thousands of organizations.

In its talent management suite, SumTotal has made it easier to manage ratings toward company and departmental goals and objectives,  improved the application’s workflow and provided editing of goals. It enables faster comparison in succession planning on specific positions. Integration with Microsoft SharePoint is improved. Companies can customize the branding of the applications to better integrate them into their own look and feel. The workforce analytics application is especially powerful, with a significant amount of content and depth in analytics and metrics. It has embedded IBM Cognos to provide a robust set of interactive capabilities on platforms from browsers to mobile devices such as Apple’s iPhone.

SumTotal Systems has entered a new phase with the breadth and depth of its application suite. I have spoken with many of its global customers, who said they like the ability to expand with the company’s software as they replace legacy or one-off purchases of other applications.

However, the company still faces challenges with brand and product awareness for its breadth and depth of offering, though it provides what appears to be a more robust offering than others, such as Oracle and SAP to name a few, which recently acquired Taleo and SuccessFactors, respectively, and are integrating these offerings with their existing applications. Both of these companies realized the importance of expansion which was part of inspiring them to be acquired and help Oracle and SAP efforts.

SumTotal Systems has wisely been investing in its mobile technology capabilities, especially with its LMS offering, where it can support natively 11 languages. It will need to advance further to support manager applications on leading tablets like Apple and Android based devices and must improve its social collaboration capabilities across its entire suite to help enhance employee engagement. One of the places it should improve is in social recruiting; using social media as a talent pool requires specific capabilities, as we found in our recent social recruiting benchmark research. SumTotal’s choice of cloud computing, hosted and on-premises is attractive to organizations that are not fully on-board with renting software on the Internet.

Despite some areas for improvements, SumTotal Systems is a vendor to reckon with in the market for human capital management. The company has a significant opportunity to be a strategic supplier to not just HR but to CFOs and heads of business that realize that applications and information about their workforce complement the activities within the business processes, since they reveal who the right engaged and skilled people are in the effort to achieve business objectives. To sum it all up, if you have not looked at what SumTotal offers, especially with its 2012 releases, you may be pleasantly surprised to see what is available from a single human capital management application supplier.

Regards,

Mark Smith – CEO & Chief Research Officer

Mark Smith – Twitter

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