On 4 March 2004, Workscape announced that it has acquired all of the assets of Performaworks. Terms of the deal were not disclosed.

The Performaworks acquisition enables Workscape to add performance management functionality to the compensation management capabilities in its OneForce product line. Performaworks has eight customers, none of which are Workscape customers, so this acquisition is focused on product functionality and domain expertise, not on acquiring an installed base. The deal will accelerate Workscape's move toward a talent management suite, and enable it to compete more effectively against major compensation management competitors such as Advanced Information Management, Kadiri, Callidus Software and Cezanne Software.

Both vendors use a similar technical architecture, based on Java 2 Platform, Enterprise Edition (J2EE), and WebSphere. This will make integration easier. Workscape plans to provide a "shared user experience," which includes single sign-on, a common user interface and basic integration (overall performance ratings automatically populate compensation modeling and allocations) on a common technology platform in 2004. Workscape has set June 2005 as its target date for delivering an "integrated user experience" that will include an integrated workbox, the ability to have specific performance components drive specific compensation components, common views of employee and organizational data, common security infrastructure and consolidated reporting. The last phase of integration will support shared application services for configuration, reporting, workflow and content authoring/publishing based on the OneForce platform. Gartner believes this a reasonable and well-thought-out approach to product integration.

Recommendations: Customers of Workscape and Performaworks don't need to do anything at this point, but benefits lie ahead. Performaworks customers will benefit from a vendor with more financial strength and a larger, more diverse set of products and services. For example, Workscape has portal and employee self-service products and services and employee benefits management services, in addition to its manager self-service applications. Workscape also has significant experience building highly scalable, self-service solutions. Moving to the OneForce platform should help high-volume Performaworks customers that have had scalability issues. Workscape and Performaworks customers will have an opportunity to implement an integrated, pay-for-performance product with strong functionality and a high degree of configurability.

Analytical Source: James Holincheck, Gartner Research

Recommended Reading and Related Research

• "Predicts 2004: HCM and Financial Applications" — Human capital management (HCM) and finance users must balance their desire to be more strategic with the need to comply with new government regulations. By James Holincheck and Lee Geishecker
• "Finance and HCM Client Issues for 2004" — Gartner addresses several key questions that will challenge HCM and finance users in 2004. By James Holincheck, Brian Wood and Lee Geishecker

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