Enterprise Social Software: A New Category

Posted on October 2, 2008. Filed under: Enterprise Learning, HR Systems, Learning 2.0 | Tags: , , , , , , , , , , , , , , , , , , , , |

This week we introduced some important and groundbreaking research on a new, important category of enterprise software:  the market for corporate Social Software platforms.   Traditionally our research has focused on identifying the strategies, processes, and systems which help corporate HR and L&D drive effectiveness and business value.  But as we continued to study the market for Talent Management and Learning Management software, we found that almost every software vendor was building features for internal social networking.

As we talk with corporate HR and L&D leaders they tell us that more and more of their focus is moving toward strategies and systems which support and create internal social networks, internal collaboration, content sharing, and informal learning.  So naturally we asked ourselves, how is this all going to come together?

Our research found several things.  First, today most companies are experimenting with many forms of social software in the areas of employee expert directories, customer service, customer community management, sales force collaboration and knowledge management, and technical communities of practice.  In fact, more than half the companies we talked with have active, highly sophistocated communities of practice in many of their customer facing and technical roles.  

Second, we found that very few companies have found a way to apply these tools and solutions to enterprise-wide HR, learning, and talent strategies.  Some, like IBM and Cisco, have invested heavily in this area and are well along on implementing what we call “learning on-demand” solutions internally.  But most companies are still bringing together teams from IT, HR, L&D, sales, and service and trying to figure out how an enterprise-wide social networking strategy would work.

Third, we found that this new application segment has spawned a large and very fast-growing segment of software providers.   While the jury is still out on whether these companies will grow into billion dollar companies or be subsumed into the likes of Oracle, SAP, Microsoft, IBM, and others, we believe that for the next 3-5 years these companies will become very important in the development of strategies and solutions for enterprise-wide learning and talent strategies.  The market is already over $270 Million and we expect it to grow to over $400 Million by the end of 2009.

These new, fast-growing companies like Atlassian, Jive Software, LiveWorld, Mzinga, and Telligent have built highly functional systems which implement the four major categories of “Social Software” – conversations, connections, collaboration, and content.  While most are not uniquely targeting the market for HR and corporate training, all are moving in this direction and they warrant a good look by your organization.

Does this mean that the market for Learning Management Systems (LMS) and content management systems is going away?  No, not at all — but it clearly means that a new “category” has been created, and this new category will challenge LMS providers and corporate buyers to think hard about how they build their next-generation HR and Learning systems architectures.

I encourage our clients to learn about this space – it is transformational.  Our upcoming research bulletin on the role of Social Networking in Enterprise Learning and Talent Management will help you learn more.

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Your “Incumbent” HR Systems Vendor – What to do?

Posted on August 19, 2008. Filed under: HR Systems, Talent Management | Tags: , , , , , , , , , , |

I just completed a series of interviews with three organizations going through the important, challenging, and time consuming process of implementing a new performance management system.  In each case (a large healthcare provider, a global mining company, and a global call center operations company), the company is using the implementation of a performance management system to implement a new, re-engineered, strategic performance management process.  But rather than discuss this, I’d like to give you some thoughts on their vendor strategy.

These three companies each chose to use their “incumbent” systems vendor.  Rather than go to the “biggest” or “noisiest” systems vendor (I wont mention any names), they felt that they would see far greater benefits by using a newer system from their provider of recruiting software.  Why did they do this?  Because in each case they felt they had a wealth of data, experience, and strong working relationship with this company.

This points out two critical points, which we are publishing in a major research bulletin in the next few weeks:

1.  The biggest ROI from HR systems comes from integration, not automation.  As Leighanne Levensaler, our Director of Talent Management research has pointed out in many of her findings, the real breakthrough benefits of HR systems now come from newly enabled applications, such as pay-for-performance, integrated career and development planning, enterprise succession management, and strategic internal and external recruiting – not from automating or improving a single process.

As our data will prove, this means that the benefits of integration are now far greater than the potential downside of going with a product which may be missing a few features.  (Assuming your incumbent vendor is developing the features you need.)

This means that if your LMS vendor has a solution, or your recruiting vendor has a solution (or even your ERP vendor), you should really look hard at the time, energy, and existing investment you have made in this system before you rush out and bring in a new solution provider.  Obviously there are tradeoffs when your incumbent vendor is not keeping up, but in today’s HR systems world remember that “integration” is far more important than “automation.”

2.  The big “Incumbents” are getting their acts together.  The second point I want to make is that the traditional incumbents (recruiting systems providers, ERP providers (Oracle, PeopleSoft, SAP, Lawson), and LMS providers) are all getting their “talent and performance management” software acts together.  While there are many feature differences between the providers (and our Talent Management Suites research will help you identify these), all now provide some form of an end-to-end solution which includes performance management.

While this continues to be a wild and wolly world of innovation (watch social networking coming around the corner), we think the role of your incumbent is becoming more important than ever.

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Talent Management Suites: Research Launched

Posted on January 16, 2008. Filed under: HR Systems, Talent Management | Tags: , , , , , , , , , , , , , , , , , , , , |

We just released the largest-ever research study on the market for talent management suites.  This research took place over the last 18 months and is the result of an exhaustive analysis of 20 vendors, 800+ HR managers, and in-depth meetings with more than 50 organizations.  Leighanne Levensaler, our principal analyst in this area, is responsible for this tremendous effort.  (Click here to download the table of contents.)

A few key findings: (press release available here)

  • This is a very big market.  We estimate the total market at $2.3 billion in 2008 (this includes software and services for compensation, performance management, learning management, succession management, and recruiting systems), and growing at almost 20% per year.  For an overview of the segments, please click here.
  • There is no real “leader” yet.  As the research points out, several vendors are growing very quickly, but none command enough market share to come close to being the “leader.”  With new vendors continuing to enter (payroll providers, for example), the market will continue to expand before a real “leader” emerges.
  • We evaluated the software solutions using a technique we call “capability charts” – which show you the depth of functionality, experience, growth rate, and market adoption of each product in each functional area.  What these charts show is that each vendor has some very strong areas, some strong areas, and some “emerging” areas.The three vendors with highest ratings include CornerstoneOnDemand, StepStone, and SuccessFactors.  Other important vendors include: Authoria, Halogen Software, HRsmart, Kenexa, Lawson, Learn.com, Oracle, PeopleSoft, Plateau, Saba, SAP, Softscape, SumTotal, Technomedia, TEDS, Vurv, and Workstream.
  • Our research found that very few organizations have really adopted the end-to-end suite yet.  Large organizations find this very difficult, because of their large tapestry of existing legacy systems.  We do believe that the existence of these new systems is enabling people to map a 3-5 year architecture to converge and combine HR applications. 
  • There truly are many breakthrough new talent management and business applications possible with these systems.  Initiatives like pay for performance, integrated development planning, performance-driven succession management, leadership development, workforce alignment, career development, etc. are all difficult to do without an integrated solution.  We clearly see tremendous business improvements possible with these new systems.

We have many many case studies to share in this area.  We look forward to your comments in this exciting new area of talent management.

You can listen to Leighanne’s overview here.  Download the study overview here.  Purchase the research report here.

If you would like to review some of the other materials on this market, please visit our talent management suites research program or join our membership program.

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