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  • This is the lifecycle of strategic processes at a high level. On-boarding is the arrow between recruitment and learning and really does pull from both. Performance and compensation should overlap as a combined solution, and to some degree learning could underpin them both. Now, we are going to take a view into the logical lifecycle of deploying these solutions – this could be different for different organizations based on needs, but the general progression should be as follows.
  • This is the lifecycle of strategic processes at a high level. On-boarding is the arrow between recruitment and learning and really does pull from both. Performance and compensation should overlap as a combined solution, and to some degree learning could underpin them both. Now, we are going to take a view into the logical lifecycle of deploying these solutions – this could be different for different organizations based on needs, but the general progression should be as follows.
  • One of the largest software companies in the world. Released EBS in Jan. 07 which provides functional enhancements to review automation and goal/objective management.

Zach Thomas Paul Hamerman Senior Analyst Vice President Zach Thomas Paul Hamerman Senior Analyst Vice President Presentation Transcript

  • August 20, 2007. Call in at 10:55 a.m. Eastern Time Zach Thomas Paul Hamerman Senior Analyst Vice President Forrester Research Teleconference Forrester Wave ™ : Integrated Performance And Compensation Solutions
  • Theme Pay for performance is a business necessity and drives bottom line results
  • Agenda
    • What are performance and compensation solutions?
    • Performance and compensation market trends
    • The Forrester Wave ™ : Performance and compensation solutions, Q3 2007 — review and analysis
    • Vendor summaries
    • Summary and recommendations
  • The pillars of strategic HCM Source: March 30, 2007, “Learning And Talent Management Join Forces” report. Recruitme n t L earning manageme n t s y s t em (LMS) P e r f orman c e C ompens a tion Recruitment Learning management system (LMS) Performance Compensation
  • The pillars of strategic HCM Source: March 30, 2007, “Learning And Talent Management Join Forces” report. Recruitment Learning management system (LMS) Performance Compensation Recruitme n t L earning manageme n t s y s t em (LMS) P e r f orman c e C ompens a tion
  • Keys performance management processes
    • Performance management
      • Goal management
      • Performance review automation
      • Career development and planning
      • Succession planning
  • Key compensation management processes
    • Compensation
      • Pay for performance
      • Compensation planning and analysis
      • Salary and incentive management
      • Compliance
  • Agenda
    • What are performance and compensation solutions?
    • Performance and compensation market trends
    • The Forrester Wave ™ : Performance and compensation solutions, Q3 2007 — review and analysis
    • Vendor summaries
    • Summary and recommendations
  • HR/HCM market overview
    • Core HRMS is the largest segment at $5 billion, or 48% of the total market
    • Best-of-breed segments are dynamic:
      • Recruitment — mature and fragmented
      • Workforce management — mature concentrated
      • Performance and talent management — rapidly evolving
      • Learning management — benefiting from new technology
    Base: 2006 worldwide HR/HCM application license and SaaS revenues Source: January 23, 2006, “HR/HCM Applications: Strategic Processes Move To The Forefront” report.
  • HR/HCM segment growth analysis Source: January 23, 2006, “HR/HCM Applications: Strategic Processes Move To The Forefront” report.
  • Trends
    • HR transactional applications are mature, but companies need to get to a single system of employee records.
    • Performance focus: Business strategies drive individual goals and measures.
    • Our aging workforce demands proactive talent retention and development strategies.
    • Software-as-a-service (SaaS) is well established in HR/HCM applications, blending more with outsourced services.
    • SOA technology is starting to affect software delivery and partnering strategies.
  • HCM value curve Tactical Value Retention Productivity Service Efficiency Loyalty Performance Strategic
  • Agenda
    • What are performance and compensation solutions?
    • Performance and compensation market trends
    • The Forrester Wave ™ : Performance and compensation solutions, Q3 2007 — review and analysis
    • Vendor summaries
    • Summary and recommendations
  • Evaluated vendors enter the market from different angles
  • Evaluation criteria Competency management Goal management Performance review process Career development planning Succession planning Compensation management Global support Usability Technology Customer experience How well does the product support competencies? How well does the product manage goals? How well does the product support performance review automation? How well does the product support career developmental planning? How well does the product support succession planning? How well does the product support compensation management processes? How well does the solution support multinational requirements? How easy is the product to use? How well does the solution compare across technology factors? How well does the vendor handle customer support? Current offering
  • Evaluation criteria Strategy Product strategy and vision Deployment options R&D Strategic alliances Does the vendor have a sound and well-defined product strategy and vision? What options does the vendor provide for deployment of the application? What is the vendor’s commitment to R&D? How well does the vendor leverage strategic alliances?
  • Evaluation criteria Customer base Revenue Revenue growth Employees How large is the vendor’s base of customers for this product and for all products? What was the vendor’s revenue over the past four quarters? What was the vendor’s year-over-year revenue growth over the past four quarters? How many engineers does the vendor have dedicated to this product? How big is the vendor’s sales presence? Market presence
  • Integrated performance and compensation Source: August 17, 2007, “The Forrester Wave™: Integrated Performance And Compensation Solutions, Q3 2007” report SuccessFactors Softscape Oracle SAP Oracle PeopleSoft Authoria Plateau Systems SumTotal Systems Halogen Software Kenexa
  • Performance Source: August 17, 2007, “The Forrester Wave™: Integrated Performance And Compensation Solutions, Q3 2007” report SuccessFactors Softscape Oracle SAP Oracle PeopleSoft Authoria Plateau Systems SumTotal Systems Halogen Software Kenexa
  • Compensation Source: August 17, 2007, “The Forrester Wave™: Integrated Performance And Compensation Solutions, Q3 2007” report SuccessFactors Softscape Oracle SAP Oracle PeopleSoft Authoria Plateau Systems SumTotal Systems Halogen Software Kenexa
  • What It Means
    • Aboriginal performance vendors fared best.
    • Learning vendors are entering the game.
    • Differentiation is emerging — and will continue.
    • ERPs lag behind best-of-breeds, but are investing to catch up.
  • Agenda
    • What are performance and compensation solutions?
    • Performance and compensation market trends
    • The Forrester Wave ™ : Performance and compensation solutions, Q3 2007 — review and analysis
    • Vendor summaries
    • Summary and recommendations
  • Overall thoughts about the Forrester Wave ™
    • The performance and compensation market is hot.
    • We only evaluated a small portion of vendors.
    • The market is still in an innovative phase.
    • Leaders today do not have the market locked up — even for the short term.
  • Contenders: On-premise solution providers with process breadth (not depth) suited for existing customers.
  • Oracle Strengths Compensation Process coverage Integration Global capabilities Weaknesses Usability Functional depth Succession planning Career development & planning
  • Oracle PeopleSoft Strengths Process coverage Global support Integration Weaknesses Usability Functional depth Customer adoption
  • SAP Strengths Process coverage Global support Integration Weaknesses Usability Functional depth User adoption
  • Strong Performers: Enter the market from different angles; namely learning, recruitment, and performance.
  • Halogen Software Strengths Usability Goal management Competency management Performance review process Weaknesses Scalability Global support Charting
  • Kenexa Strengths Software AND consulting blend Usability Review process automation Charting Weaknesses Compensation Global support Product integration strategy
  • Plateau Systems Strengths Review automation Career development Breadth of strategic footprint Weaknesses Product integration Usability
  • SumTotal Systems Strengths Unique review ratings Career development & planning Goal management Review automation Weaknesses Comprehensive compensation Global support Succession planning
  • Leaders: Aboriginal performance vendors fared best with best-of-breed functionality and greater dedication to SaaS.
  • Authoria Strengths Process breadth and depth Usability Competency management Succession planning Weaknesses Global support Career development & planning Business model shift
  • Softscape Strengths Global support Compensation Usability Process coverage Weaknesses Product vision and strategy Strategic alliances
  • SuccessFactors Strengths SaaS offering Goal management Competency management Review automation Weaknesses Usability Compensation Financials
  • Agenda
    • What are performance and compensation solutions?
    • Performance and compensation market trends
    • The Forrester Wave ™ : Performance and compensation solutions, Q3 2007 — review and analysis
    • Summary and recommendations
  • Recommendations
    • Create a long-term integrated HCM strategy — and use it to evaluate vendors.
    • Performance and compensation initiatives are about people and change — software is only a small part.
    • Use SaaS (on demand) to validate success up-front.
    • As an HR professional, this will be your most strategic and visible project across the enterprise.
  • Thank you Zach Thomas +1 617.613.6219 [email_address] Paul Hamerman +1 804/379-0518 [email_address]
  • Selected bibliography
    • March 30, 2007, “Learning And Talent Management Join Forces” report
    • January 26, 2006, “HR/HCM Applications: Strategic Processes Move To The Forefront” report
    • August 17, 2007, “The Forrester Wave™: Integrated Performance And Compensation Solutions, Q3 2007” report