The latest Talent Management Technology Value Matrix (TMTVM) by Nucleus Research is out, and the report is making some waves. The report places talent management vendors in one of four quadrants on a matrix: Leader, Expert, Facilitator, and Core Provider. But it goes beyond that, offering thoughts and ruminations on where the industry is, and where it’s going.
We wanted to dive deeper into this report, so we sat down with one of its authors, Brent Skinner, Principal Analyst at Nucleus Research for a little Q&A.
Can you talk a little bit about what criteria Nucleus looks at when placing talent management vendors on the matrix?
First off, for all our Value Matrices — not just Talent Management — we generally look at tier-one vendors, which aptly describes Saba Software. We consider vendors who offer solely talent management, as well as those that provide talent management in tandem with the rest of a typical HCM suite.
We include performance management, learning, talent acquisition and other areas of focus under the large umbrella of talent management. Some categorize these areas of activity differently – most notably, many analysts exclude talent acquisition and learning management, but Nucleus believes they’re all a part of talent management.
How is this report different from other analyst reports that place vendors on a quadrant?
Nucleus looks at all vendors from the most objective standpoint possible and only at the viability of the solution itself. We use just two criteria for our Value Matrices: functionality and usability, with functionality on the horizontal axis and usability on the vertical.
Vendors with a great deal of both functionality and usability will appear in the upper-right quadrant—the Leader quadrant—of a Nucleus Value Matrix. Readers of this and previous years’ TMTVM reports may also notice a cluster of talent acquisition-focused “best-of-breed” vendors in the Facilitators quadrant. These vendors specialize in this exceedingly important subset of talent management, but because they cover only this area, their breadth of functionality does not place farther to the right.
Why do these criteria matter most to buyers of this type of technology?
At the end of the day, the breadth of functionality and product usability are what matter most to prospects. Everything else, while interesting or even important, pales in comparison in terms of the technology itself.
Other analyst reports, for example, may look at these two variables to a degree, but will also factor more subjective criteria into the equations determining a vendor’s placement in their reports. Market presence could be one such criterion.
Some may also take into consideration the total revenue or size of a vendor’s market cap as an indicator of the provider’s ability to execute on innovation and growing the solution. This is an interesting, perhaps helpful, but nevertheless subjective way of looking at matters.
Early in the report, you note that little has changed in terms of vendors’ positions in the quadrants compared to last year’s report, but that there’s an exception of note. Can you explain a little about that?
Saba, actually, was the big exception this year. Through its acquisition of Halogen, Saba has really harnessed the spirit of what it’s going to take to thrive in the talent management technology market for years to come.
Why do you consider the combination of Saba’s strength in learning with Halogen’s strength in performance to be important for HR buyers? What do you see happening in these two pillars of talent management that make it so compelling?
It’s one of the clear ways forward for vendors who focus solely for talent management—and it’s smart. Against the backdrop of what I just described, there is an emerging need among employers for best-of-breed, knife-edged solutions, as I like to call them. These are the evolutionary descendants of the point solutions of the past. They slice deeply and surgically across a mutually beneficial cross-section of talent management.
In the case of Saba—now with Halogen at its side—this cross-section is learning and performance management, and it’s one of the meatier, more dynamic areas of potential benefit for users today.
Lots of end-to-end HCM vendors cover these areas, but at nowhere near the depth that Saba does. This cross-section is where employee engagement gains traction and begins to have a discernible effect on an organization; it’s where employer culture manifests as results.
The report also contains some predictions of consolidation in talent management software space over the next few years – can you comment on that?
Vendors at the leading edge of this acquisitive wave are probably the smartest ones in the space. They get it, and as we speak they’re retooling themselves not just to remain competitive, but to win. And by that, I mean that their customers will win. Most important, they’re the evolutionary players. They’re the ones driving the transformation of what it means to be a vendor in the talent management space.
Download the Talent Management Technology Value Matrix by Nucleus Research
Want to read the report for yourself? Download the Talent Management Technology Value Matrix by Nucleus Research here.
Thanks, Brent, for sharing your insights on the future of the talent management technology space!