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New Bersin & Associates Study Foresees Significant Growth for Talent Management Systems Market

Currently Assessed at $2.2B; Company Predicts 15% Growth over Next Year

Chicago, IL – September 30, 2009 – Bersin & Associates, the only research and advisory firm focused solely on enterprise learning, talent management, and talent acquisition, today announced the release of its latest study, Talent Management Systems 2010: Market Realities, Implementation Experiences, and Solution Provider Profiles. The study is the most comprehensive market review and buyers’ guide for talent management software systems.

Despite the recession, Bersin & Associates’ research finds that the talent management systems market has thrived over the last year as vendors have seen significant growth in adoption. Based on market data and information provided by vendors, Bersin & Associates projects that the market will expand by 15 percent over the coming year.

While the market is highly fragmented – more than 30 companies offer talent management systems or suites – leaders are beginning to emerge. Among the market share leaders by revenue are Taleo, SuccessFactors, SumTotal Systems, Saba, Halogen Software and Kenexa.

"Taleo and SuccessFactors have done very well this year, in large part because of significant new offerings and customer responsiveness. Much of SuccessFactors’ growth is a result of its strategy to target the mid-sized companies – a largely untapped market," said Josh Bersin, president. "SumTotal and Saba have benefitted from their established leadership in the enterprise learning market." Bersin will be among the analysts participating in a general session discussion of technology trends and predictions on Thursday, October 1, at the HR Technology Conference in Chicago.

“But, it’s important to note that the race for market leadership is far from over,” Bersin added. “You can’t count out ERP vendors such as Oracle and SAP. Additionally, we’ll be seeing more emphasis on talent management from talent acquisition system vendors. And almost every LMS vendor now has a talent management offering. This market is still very young, with plenty of potential for new entrants."

Madeline Laurano, principal analyst and contributing author, emphasized that the talent management systems market is characterized by innovation, strategic partnerships, and rapidly evolving functionality. “We’ve seen amazing new offerings and features in the demonstrations conducted for this study. For instance, providers such as Taleo, Cornerstone OnDemand, SuccessFactors, Learn.com, Plateau, and Saba have all introduced advanced features supporting social networking."

Other findings of the research include:

  • Currently, traditional ERP providers are losing market share to companies specializing in talent management offerings. Over 67 percent of organizations surveyed had evaluated ERP providers’ talent management offerings, yet only 19 percent selected these solutions. However, these solutions shouldn’t be ruled out. As pointed out in the study’s evaluations, the latest releases from the ERP providers are very competitive and even offer unique benefits over pure talent management software providers.
  • Most buyers today realize they must clearly define an integrated talent management systems strategy. Recent economic conditions have demonstrated to executives the importance of assessing the health of their talent pools and knowing which employees have critical skills. Over 75 percent of organizations surveyed indicated that they are defining how and when they will integrate current HR solutions or are considering new integrated offerings.
  • Integrated offerings are clearly winning out over best-of-breed selections. Almost 17 percent of organizations with talent management software have implemented one or more modules from an integrated suite; 34 percent of those surveyed indicate they intend to purchase an integrated solution from a single solution provider.
  • Big-bang implementations are rare. While 56 percent of organizations surveyed intend on purchasing a full or partial talent management suite, fewer than 10 percent will buy an entire suite and implement the solution at one time. Rather, most organizations implement one to two modules at a time to address a specific need (such as pay-for-performance, succession management, or integrated talent development), with the intention of expanding the solution in the future.

The 400-plus-page study is based on detailed briefings and product demonstrations provided by 24 vendors; completed surveys from 460 HR, learning and development, and information technology professionals; and more than 40 interviews with HR and talent leaders. In addition to its market analysis, the study includes many resources for prospective buyers and current system users, including: best practices for cost justification of talent management systems, how the talent management system fits into an integrated talent management strategy, proven implementation and delivery models, top talent challenges and the associated role of technology, Bersin & Associates’ Talent Management Framework, and selection checklists.

Vendors profiled in the report are: Authoria, Beeline, Cornerstone OnDemand, Halogen Software, HRsmart, Kenexa, Lawson, Learn.com, Meta4, Oracle (EBS), Oracle (PeopleSoft), Plateau, Saba, Salary.com, SAP, SilkRoad technology, Softscape, StepStone, SuccessFactors, SumTotal, Taleo, Technomedia, TEDS, Watson Wyatt, and Workstream.

Each profile includes: product capabilities by module, evaluation of key features and processes for integrated talent management, evaluation of end user experiences, and a snapshot analysis covering product strengths, opportunities for improvement, near-term planned enhancements, and best-suited customers.

The report also contains a market share maps by revenue, customers, and size of customers and a range of vendor comparison charts.

Talent Management Systems 2010: Market Realities, Implementation Experiences, and Solution Provider Profiles is available at no cost to all Bersin & Associates research members. Non-members can purchase the study for $995. For more details, including an executive summary and a table of contents, go to www.bersin.com/tmsystems.

About Bersin & Associates

Bersin & Associates is the only research and advisory firm focused solely on research in enterprise learning, talent management, and talent acquisition. The company’s WhatWorks® membership program offers actionable guidance, improves operational effectiveness, and delivers business impact to companies in all industry segments.

Bersin & Associates research members gain access to a comprehensive library of best practices, case studies, benchmarks, and in-depth market analyses designed to assist professionals in making fast and confident decisions. Members also have direct access to analysts and a wide range of tested tools and models to address both strategic and day-to-day challenges.

More than 5,000 organizations worldwide have used Bersin & Associates’ research and advisory services to guide talent and corporate learning strategies. Research areas include planning and strategy, learning programs and delivery, talent management, leadership development and succession planning, talent acquisition, technology and infrastructure, informal learning, social networking, measurement and analytics.

For more information, go to www.bersin.com or call 561 455 0622, extension 223.