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Cornerstone OnDemand - Next Generation HCM Technology

Cornerstone OnDemand - Next Generation HCM Technology

Who Is This Vendor Assessment For?
NelsonHall’s HCM Technology Vendor Assessment for Cornerstone OnDemand is a comprehensive assessment of Cornerstone OnDemand’s HCM platform offering and capabilities designed for:
• Sourcing managers monitoring the capabilities of existing suppliers of HCM technology and identifying vendor suitability for HCM technology RFPs
• Vendor marketing, sales, and business managers looking to benchmark themselves against their peers
• Financial analysts and investors specializing in the HR Technology sector
• HR and payroll decision makers.

Key Findings & Highlights
Cornerstone OnDemand ('Cornerstone' or 'CSOD') is a cloud-based talent management, and human capital management software provider based in Santa Monica, California.

CSOD was formed in 1999 under the name CyberU and operated as a provider of online corporate training and education. Through client and market demand, it's offering evolved and it pivoted toward talent management and learning solutions.

CSOD has a history of innovation in the talent management space, including launching its SaaS-based talent management platform in 2001, followed by integrated talent management in 2005. It introduced social networking in its talent management suite in 2008, and prescriptive talent analytics in 2014.

In March 2011, Cornerstone OnDemand launched in IPO and began trading on the NASDAQ under the ticker CSOD.
In 2017, CSOD announced that it had received a $300m investment from Silver Lake and LinkedIn (a Microsoft company) to help expand and revise its capital structure, as well as to support a strategic partnership for learning content from LinkedIn.

Although Cornerstone has primarily developed its platform organically, it has made select acquisitions to boost its capability.
As of June 2019, CSOD supported >3.5k clients, serving ~42m users in 192 countries, with 43 languages, and supported by 21 offices globally.
CSOD's HCM platform is entirely cloud-based with a single database architecture and is offered as a multi-tenant solution.

CSOD offers a modular approach, so there are no forced modules required for startup; clients can pick and implement any combination to fit their unique needs. Its HCM offering is focused on the transformational elements of HR vs. transactional, and therefore, purposely lacks native payroll and benefits modules.

CSOD offers four modules within its HCM suite, including the following high-level features; all modules are mobile-enabled with self-service capability, built-in workflow, automation, and embedded prescriptive and predictive analytics across modules, and are capable of supporting 43 languages:
• Recruiting
• Performance
• Learning
• HR.

CSOD offers integration through a tool it calls Edge; with Edge, clients can connect and integrate Cornerstone's modules with other applications through prebuilt integrations; Edge also provides intuitive configuration tools and flexible APIs. Edge includes the Cornerstone marketplace for prebuilt connectors and trial integrations which allow clients to test integrations before purchasing.

Average contract lengths are approximately three years, and pricing is on a PEPY (per employee per year) basis, with each suite having a modular price, so clients are charged per module, per employee, per year. This includes licensing and support; premium support is offered at a higher price if desired (e.g., 24/7 support vs. business hours support).

Implementation fees have historically been priced separately (based on scope, complexity, timeline, etc.) and are generally cheaper than most competitors, with fewer integrations being needed through its single code, single database architecture. As of 2018, CSOD has enabled nearly all of its platform implementations through its partner network of system integrators (SIs), which set the pricing for new client deployments.
CSOD has historically invested heavily in R&D to push more innovation into its platform and solutions; in FY18, its R&D spend was ~$77m or ~14% of its total revenues.

CSOD provides four quarterly releases per year; these new feature releases are based on roadmap initiatives but also derived from client and user feedback and voting. Cornerstone's focus for the platform roadmap is to drive talent experiences through modernized UI, personalized UX, and delivered where work occurs (e.g., on mobile, in apps like Slack, Salesforce, etc.)

CSOD has ~2k employees globally with locations across all major geographies.
CSOD maintains data centers in the U.S., U.K., France, and Germany; collectively these data centers maintain uptime of 99.99% for its platform.
Implementation of its modules was historically split between internal CSOD resources and system integration partners (SIs), e.g., IBM, Accenture, and Deloitte. However, in early 2018, CSOD announced that it would push all implementations through its alliance partners, allowing these partners to scope, price, and deliver implementations of its platform, but also to refer business to CSOD. It has since refocused its resources on supporting and delivering customer satisfaction rather than focusing on implementation.

Implementation times vary depending on scope, and modules deployed. Cornerstone's modules can be implemented in a matter of weeks or months, depending on client needs. Cornerstone is increasingly seeing improvements to its deployment times, enabled by its Edge integration tool, which also provides a self- service data load platform to empower clients and partners to support their data import needs.

CSOD has a well-established set of alliance partners curated by an alliance team in charge of the relationship with partners. All CSOD partners are trained and certified on its platform modules; partners are segmented into three categories:
• Content partners
• Services partners
• Technology partners

CSOD positions itself as a talent-driven HCM provider, and therefore focuses its solution on the transformational vs. transactional elements of HR. The Cornerstone platform can also act as a flexible wrapper or connector to consolidate systems globally, and to connect it to CSOD's various modules based on client needs. CSOD tends to sell one module initially (learning being the most popular, with ~85% of clients) and up-sell or expand module scope over time.
Its offering is globally focused, and although it has historically been targeted to the middle and large enterprise client, however, it is increasingly targeting clients below 1k and segments its client base as follows:
• Small market segment: <1k employees
• Enterprise/Upmarket: >1k employees.

Cornerstone currently supports ~3.5k clients that range in size from ~1k to >600k employees; its largest markets are in the U.S., U.K., and France.
While Cornerstone's platform is industry neutral, it serves clients in a range of industries, with the highest concentration of clients derived from the following industries, financial services, retail, business services, manufacturing, healthcare, public sector (with a strong presence in the US), technology, energy/chemicals, and nonprofit.
CSOD sells its software and services directly through its sales force, and indirectly through a domestic and international network of distributors.

Scope of the Report
The report provides a comprehensive and objective analysis of PeopleStrategy’s Next Generation HCM Technology offering, capabilities, and market and financial strength, including:
• Identification of the company’s strategy, emphasis, and new developments
• Analysis of the company’s strengths, weaknesses, and outlook
• Revenue estimates
• Analysis of the profile of the company’s customer base including the company’s targeting strategy and examples of current contracts
• Analysis of the company’s offerings and key service components
• Analysis of the company’s delivery organization including the location of delivery locations.

1. Background
2. Revenue Summary
3. Key Offerings
4. Delivery Capability and Partnerships
5. Target Markets
6. Strategy
7. Strengths & Challenges
7.1 Strengths
7.2 Challenges
8. Outlook

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