New market within human capital management to witness dramatic growth, according to Yankee Group
Boston — March 9, 2005 — New findings from Yankee Group's Employee Effectiveness research reveal that expenditure on workforce lifecycle management (WLM) applications will exceed $1.4 billion in 2005.
The new report, "Workforce Lifecycle Management Is the New Frontier in Human Capital Management," highlights the rapid growth of strategic human capital management solutions and current trends, including the convergence of four key strategic components: talent management, performance management, incentive management and learning management applications. Yankee Group identifies this newly integrated market as WLM.
The report also predicts strong and ongoing growth for the WLM market. The anticipated 17 percent compound annual growth rate (CAGR) is driven by more effective approaches to the management, monitoring, measuring and development of an organizations workforce, with completely integrated offerings from onboarding to succession planning, combined with an on-demand delivery model that makes it easier and more affordable to implement.
In addition, increasing growth in human resources and other business process outsourcing (BPO) contracts are driving license sales of WLM solutions, particularly where WLM solutions provide lasting value and key differentiators within HR BPO offerings.
"HR departments are witnessing a rapid shift from tactical, transaction-focused HR solutions, toward more strategic value-added components within their organizations," said Jason Corsello, senior analyst at Yankee Group. "An integrated WLM approach is fast becoming a strategic initiative at thought-leading organizations. Workforce lifecycle management solutions are providing a framework for management to retain, manage and develop their top talent much more effectively. Organizations are quickly realizing the value of adopting solutions that contribute to augmenting employee effectiveness within organizations."
To prepare this report, Yankee Group surveyed large enterprise software vendors and smaller, venture-funded vendors. Currently, Oracle-PeopleSoft is the clear market leader, although the report details the open market opportunity for vendors of all sizes to aggressively gain market traction and organizational mindshare, particularly those vendors embracing on-demand solutions, which speed adoption and drive faster ROI.
For a look at how telecommunications equipment company Avaya is using a managed service program to get a handle on its temp labor spend, read the article "A "NEW" Approach to Managing Temp Labor" in the December 2004 issue of Supply & Demand Chain Executive.
For more information on professional services procurement solutions, see the article "It's All About People," the Net Best Thing column in the January 2002 issue of iSource Business (now Supply & Demand Chain Executive) magazine.