SuccessFactors has taken a big step forward in the market for helping organizations manage their workforce’s performance and maximize the value of talent by acquiring Inform Business Impact. Originally named Infohrm, the company has been operating for 28 years, much longer than SuccessFactors, and has specialized in the last decade in selling software and providing best practices in the area of workforce analytics and planning, as well as offering benchmarking services. Having changed its name from Infohrm, which reflected its focus on HR customers, to Inform Business Impact was a move to indicate their broader focus and appeal. I find this acquisition very relevant as it places more emphasis on workforce analytics and planning, which are core tenets of what is called workforce performance management, an interest of mine for over 15 years.
Now Inform becomes a core component of what SuccessFactors recently classified as Business Execution Software, which I analyzed in 2009 (See: “SuccessFactors and Business Execution Software: Confusing or Confused?"). That shift by SuccessFactors was an effort to expand beyond Talent Management for HR and emphasize both business alignment and people performance for other areas of the organization; this acquisition is a further step in that direction. SuccessFactors is serious about expansion, as shown by the cost of the acquisition – over $25 million in cash and approximately $15 million in stock. SuccessFactors already has been successful in growing its core business of helping organizations manage performance through goals, performance reviews, compensation, rewards, succession and recently announced recruitment. Its recent fiscal year 2009 results indicated strong growth in the form of over $62 million in bookings in the fourth quarter and over $153 million in revenue for 2009. SuccessFactors also introduced a simpler method to migrate to performance reviews with EasyReviews, which is priced to be affordable for organizations of any size.
As well, SuccessFactors had recently brought to market Metrics Navigator for analysis of critical metrics, a necessary part of workforce analytics. Now Inform strengthens its foundation of planning and workforce insights from both historical and predictive analytics; it also brings reporting and a portfolio of thousands of metrics and benchmarking statistics applicable across 20 industries. Inform had grown its business to over 130 enterprise customers that apply its analytics to over 2.5 million employees. My assessment after tracking Inform’s software over the last five years was that it is functionally rich and had begun to become more useful for people who were not analytically savvy; the greatest value of the organization, however, was in its industry expertise and community of practitioners.
The combined SuccessFactors and Inform competes with vendors that combine workforce analytics and planning, including Acquire and Softscape and a new generation of workforce analytics from recently merged Peopleclick and Authoria (See: “Bedford Clicks Authoria Up a Notch of Talent with Peopleclick”). Many of the main HRMS providers also have moved in this direction. Oracle blended the analytics planning software acquired from Hyperion into Oracle Hyperion Workforce Planning, and SAP ERP Workforce Analytics has begun to incorporate the newer generation of analytics from SAP Business Objects. IBM Cognos has been advancing workforce analytics and planning for several years and it is part of a larger global services organizational effort called IBM Business Analytics and Optimization. Inform’s recent growth indicated that many companies desire to work with a dedicated provider with specialized sales and services departments and a strong community of users.
SuccessFactors is bullish in promoting its positioning of business execution software that focuses on business alignment and people performance. Whether or not you believe in their focus on “business execution,” you likely believe in the need to improve the performance and alignment of your workforce. Our benchmark research on workforce analytics had shown the importance of bringing this technology together and applying best practices, as we have been educating the market for many years. I have been working on a new revision of our workforce analytics benchmark to re-assess the maturity and competencies of buyers. Workforce analytics and planning is a core tenet of workforce performance management, which has evolved into a critical objective of many executives. SuccessFactors combined with Inform will be a strong player in this market, and organizations should consider further investment in this area.
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Mark Smith – CEO & EVP Research