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Raising The Bar in Human Capital Management Software

SuccessFactors wants to turn its on-demand human capital management (HCM) tool into a strategic application.

Typically, HCM applications are used by human resources departments and, perhaps once a year, by all employees during annual review periods. But SuccessFactors is adding new features that will make the tool more applicable to everyday functions throughout the enterprise.

The new features can be used by employees to track their own performance, take after colleagues whose career tracks they want to emulate and identify mentors within their organizations. It can also be used by companies to gather aggregated data about their personnel to help make better hiring decisions, and to see whether individual goals are tracking with organizational goals.

One new feature the company is announcing today allows employees to locate themselves within the context of their organization and identify peers and executives higher up the organizational chart. Clicking on any other name reveals that person's competencies so that employees can identify competency gaps that they need to fill in order to get promoted.

The profiles also include links to Skype, Yahoo instant messenger and may contain other personal information that individual users can add at their own discretion.

Users can also tag their profiles with keywords associated with a particular area of expertise or personal interest, making it easier for employees to identify subject-matter experts or like-minded colleagues within their organizations.

A separate feature allows executives to view a dashboard of competencies which they can use to make better recruiting decisions by showing them which attributes have led to better overall performance in each job category.

SuccessFactors, based in San Mateo, Calif., also introduced a feature called "Coach TV" which shows employees tips for improving their performance, based on gaps in their most recent reviews.

These features are in addition to standard HR modules, including performance management, compensation management, succession management and learning and development.

Rob Bernshteyn, vice president of product marketing at SuccessFactors, said the goal of the new features is to turn the application into more of a daily routine for every employee in the company.

"Every employee is a potential user of our application," he told internetnews.com.

SuccessFactors competes in this space with compensation management application vendor xActly, performance review software vendor Halogen Software and on-demand ERP vendor Workday, among others.

Yankee Group analyst Jason Corsello said that legacy HR applications typically touch just 10 percent of enterprise users.

"[SuccessFactors] represents a dramatic shift in enterprise applications," he told internetnews.com. "They're able to get a 360-degree view of the employee."

In contrast to most other SaaS  vendors, SuccessFactors charges on an annual rather than monthly basis. Bernshteyn said that, depending on the number of modules purchased, customers are charged between $50 and $100 per user per year.

Corsello estimated that SuccessFactors charges approximately $4 per month per user, compared to the $60 per user per month on average charged by SaaS industry benchmark Salesforce.com .

"It isn't entirely clear what the market has decided is the right price for every user on this model, but $4 per month is clearly more digestible than $60," he said.