SAN MATEO, Calif., June 1, 2011 /PRNewswire/ -- Today,
SuccessFactors, Inc. (NASDAQ: SFSF), the global leader in business
execution software, announced the results of a study that shows
that companies tend to achieve higher industry-adjusted stock
returns when they set and align goals, rate users on the
achievement of these goals, used more variance in performance
feedback, and leverage business execution software to increase
their ability to execute.
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http://photos.prnewswire.com/prnh/20110510/SF96907LOGO)
The findings from SuccessFactors' research group's latest study,
"How Companies Leverage Business Execution Software to Drive Excess
Shareholder Return", analyzed customers to determine what business
execution practices are actually driving incremental new
shareholder value.
Key findings from the study include:
- There is a statistically significant positive relationship
between each of the Business Execution dimensions studied and
industry-adjusted stock returns.
- A 10 percent increase in the Goal Number Dimension score was
associated with a 6 percent increase in industry-adjusted stock
returns.
- Similar results were found for 10 percent increases in the
Alignment Dimension, System Usage Dimension, and Rating Scale Usage
Dimension scores.
"From previous research studies, we already know that
SuccessFactors' customers in general grew faster than their
competitors, increased productivity and alignment of their
workforce, and also delivered superior stock returns— with this
study we wanted to dig deeper into the various ways these companies
implemented their business execution processes and learn which
practices had the greatest impact on their results," said
Erik Berggren, vice president of
global research and customer results, SuccessFactors. "We
wanted to partner with leading academics in the world and hence
turned to Stanford and Wharton Business
Schools for academic collaboration on this research. Our research
shows that companies that invest in their ability to execute,
aligning goals to strategy while creating a performance-based
culture experience higher shareholder returns. Connecting the true
heart of people's work activity with the company's strategy
ultimately drives superior execution results."
Underlying Dimensions of Business Execution Practices
The statistical analyses revealed four distinct business
execution characteristics that influence the employee performance
evaluation process:
- Goal Number Dimension: The average number of goal plans per
employee during the year,
- Alignment: The degree to which goals are aligned throughout the
organization.
- System Usage Dimension: The company's system usage style, on a
continuum from companies that use the system primarily as an
information system to those using the system to a greater extent
for performance evaluation (with a larger percentage of users
having rated goals).
- Ratings Scale: The extent to which the company uses the full
spectrum of the ratings scale (for example, more employees with
minimum and maximum ratings, and more variation in ratings).
"From an academic and practical standpoint, the link between
differences in business execution practices and firm performance
has been an important but unresolved issue. Our research on
business execution practices in SuccessFactors clients shows that
differences in many of these practices can have significant effects
on subsequent industry-adjusted stock returns, and that these
effects can be quite substantial," said Christopher Ittner, Ernst & Young professor
of accounting at Wharton Business School, University of Pennsylvania.
The SuccessFactors Execution Index©
As part of the study, the SuccessFactors Execution Index was
created to provide a quantitative way to measure the strength of a
company's ability to execute on its strategy. The Execution Index
presents results that are easy to understand and can be derived for
an individual customer without extensive data cleansing and
analysis, or across a multitude of customers.
The SuccessFactors Execution Index metric and its sub-factors
provide the ability to measure a company's actual ability to
execute with its current workforce in place. The Index can also be
used to perform a comparison between companies or to measure
changes in a given company's ability to execute over time.
"Our customers are partnering with us to create real results
from their workforce and we now have a researched backed metric
that we use to help our customers track and further improve their
ability to execute," Berggren continued.
"Working with SuccessFactors is helping us align objectives
at all levels in our organisation. This, in turn, is allowing us to
connect our employees' activities to what matters to our business,"
said Johan Jacobs, director
organisation development, Goldcorp. "We are starting to see
increased engagement from our employees and this, allied to the
talent and career capabilities the system delivers to our
company, has lead to a decrease in staff turnover and an
increase in our attractiveness as an employer. With our
partner SuccessFactors and the insight from the Execution
Index we're set to further accelerate the impact we're getting from
our investment."
For more information and to download "How Companies Leverage
Business Execution Software to Drive Excess Shareholder Return"
visit: http://www.successfactors.com/promo/stockperformance
Study Methodology
In order to better understand how the substantial differences
seen in these and other business execution practices influenced
stock performance, SF Research gathered data on 18 goal setting,
alignment, and system usage characteristics in 153 of
SuccessFactors publicly traded customers. The Wharton and Stanford researchers then used statistical methods
to determine the number of underlying business execution dimensions
captured by these variables. (Additional detail on the study
methodology are provided in Appendix II: Detailed Explanation of
Study Parameters).
About SuccessFactors
SuccessFactors is the leading provider of cloud-based Business
Execution (BizX) software solutions to organizations of all sizes,
with more than 8 million users across multiple industries and
geographies. We strive to delight our customers by delivering
innovative solutions, a broad range of content, process expertise
and best practices knowledge gained from serving our large and
varied customer base. Today, we have more than 3,200 customers
in more than 168 countries using our application suite in 34
languages.
Execution Is The Difference™
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Francisco, May 10-12,
Amsterdam, May 19-20 and Sydney, Aug.
24-25: http://www.successfactors.com/successconnect/.
"Safe harbor" statement under the Private Securities Litigation
Reform Act of 1995:
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements are SuccessFactors' current expectations
and beliefs.
These forward-looking statements include statements about future
growth prospects. Factors that could cause actual results to differ
materially from those contemplated by these forward-looking
statements include: our ability to retain customers and to
experience high customer renewal rates; whether customers renew
their agreements for additional modules or users; pricing
pressures; the uncertain impact of the overall global economic
conditions, including on customers, prospective customers and
partners, renewal rates and length of sales cycles; the fact that
the business execution market is at an early stage of development,
and may not develop as rapidly as we anticipate; risks related to
the integration of the acquisitions, including retaining customers
and employees and managing geographically-dispersed operations;
competitive factors; outages or security breaches; our ability to
develop, and market acceptance of, new services; the impact of any
discovered product defects or outages; our ability to continue to
sell our services outside the HR area; our ability to manage our
growth; our ability to successfully expand our sales force and its
effectiveness; whether our resellers and other partners will be
successful in marketing our products; our ability to continue to
manage expenses; the impact of unforeseen expenses, including as a
result of integrating acquisitions; and general economic conditions
worldwide. If any such risks or uncertainties materialize or if any
of the assumptions proves incorrect, our results could differ
materially from the results expressed or implied by the
forward-looking statements we make.
Further information on these and other factors that could affect
these forward-looking statements is included in the section
entitled "Risk Factors" in our Annual Report on Form 10-K and in
our most recent report on Form 10-Q and in other filings we make
with the Securities and Exchange Commission from time to time.
Contact:
For media inquiries:
Andrea Meyer
+1.415.370.7329
ameyer@successfactors.com
For investor inquiries:
Karen Moran
+1.650.645.4439
kmoran@successfactors.com
SOURCE SuccessFactors, Inc.