Human Resources: Global Survey Says HR Pros Want Better Ways to Gauge Workplace Performance

    MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--June 7, 2007--More than 55
percent of companies struggle when it comes to assessing employee
performance, says a survey by learning and talent management software
provider SumTotal(R) Systems, Inc. (Nasdaq:SUMT). The findings of a
global survey, distributed by SumTotal to more than 1,000 HR and
training professionals around the globe, found that nearly half (47
percent) keep tabs on workforce performance with paper, computer
spreadsheets or word-processing programs.

    "Many senior-level managers simply aren't aware that relying on a
paper-based system is an impediment to managing and fairly
compensating their employees," said Dan Boccabella, senior director
and general manager for SumTotal. "HR pros have the opportunity to
play a much more strategic role, as talent scouts inside their
organizations. But most of them are forced to rely on binoculars to
see the talent inside their companies, instead of radar."

    Well over one-third (38 percent) of respondents to SumTotal's
study cited internal time and resources as the biggest challenge to
overcome when considering technology for assessing employee
performance -- closely followed by budget challenges, at 20 percent.

    More than 30 percent of North American and European companies
surveyed said they have, or plan to buy, software for managing talent
because they are automating an existing process for gauging workforce
performance. That finding differs in Asia and Latin America.
Forty-five percent of Asian employers who responded to the survey say
that a desire "to improve their ability to assess and deploy talent"
guided their decision to buy talent management software.

    In Latin America, 39 percent of those answering the survey said
they bought, or will soon buy, talent management software "to retain
critical talent." For employers in Asia and Latin America, only five
percent and eight percent, respectively, said that automating existing
performance management processes was the reason for buying talent
management software.

    According to Boccabella, "Asian and Latin American employers
appear to be tying their purchases to a more strategic reason than
simply automating performance appraisals."

    "There's nothing wrong with HR and training professionals making
automation a part of their rationale for buying talent management
technology," said Heidi Spirgi, president and co-founder of Knowledge
Infusion, a Minneapolis-based consultancy focused on technologies for
managing corporate talent. "That might prove a good way to formalize
goals for employees and streamline a performance appraisal process
that only becomes more and more complicated for larger employers.
However, the most effective business cases combine the value of
automation with the more strategic goal of driving business value, for
instance, developing a pipeline of talent to execute a business plan,
or mobilizing talent to support new products or new markets."

    Almost half, or 47 percent, of respondents from companies of all
sizes preferred talent management software installed behind their
technology firewall - but this approach is the most taxing to a
company's IT resources.

    In contrast, the software-as-a-service, or on-demand, model is
relatively new, and its adoption rate has been limited by myths about
security and performance despite demonstrated benefits.

    "A common misconception is that the on-demand model is less
secure," Boccabella added. "In reality, a company's data may be stored
on a server dedicated only to its organization. And if not, then their
vendor should be able to demonstrate that the data is impenetrable."

    Other results from the SumTotal survey showed that most
organizations are still very early in the evolution of employee
performance management from a paper-based, manual process to a
sophisticated, online exercise that delivers strategic results such as
linking employee goals to an employer's business strategy, or tying
pay to performance.

    About SumTotal Systems, Inc.

    SumTotal Systems, Inc. (NASDAQ: SUMT) is a global provider of
talent and learning management solutions. SumTotal deploys
mission-critical solutions designed to align goals, develop skills,
assess performance, plan for succession and set compensation.
SumTotal's solutions aim to accelerate performance and profits for
more than 1,500 companies and governments of all sizes, including six
of the world's 10 biggest pharmaceutical makers, six of the 10 largest
automotive companies in the world, four of the five branches of the
U.S. Armed Forces, three of the world's top five airlines, two of the
five largest banks in the world and two of the world's top five
specialty retailers. Mountain View, Calif.-based SumTotal has offices
across Asia, Australia, Europe and North America. For more information
about SumTotal's products and services, visit www.sumtotalsystems.com.

    SumTotal and the SumTotal logo are registered trademarks or
trademarks of SumTotal Systems, Inc. and/or its affiliates in the
United States and/or other countries. Other names may be trademarks of
their respective owners.

    Safe Harbor Statement/ Forward-Looking Statements

    Information in this press release contains forward-looking
statements, including, but not limited to, the anticipated benefits of
SumTotal's solutions, such as its on-demand offering, and future
growth and usage in the markets SumTotal competes in. These statements
represent SumTotal Systems' expectations or beliefs concerning future
performance or events. These statements are not historical facts or
guarantees of future performance or events and are based on current
expectations, estimates, beliefs, assumptions, goals and objectives,
and involve known and unknown risks, uncertainties and other factors
that may cause actual results to be materially different from the
results expressed or implied by these statements. Readers of this
press release are cautioned not to place undue reliance on any
forward-looking statements. Additional factors that could cause actual
results to differ include, but are not limited to: (i) the ability to
successfully manage and increase growth outside of the United States,
significant current and expected additional competition, and the need
to continue to expand product distribution and services offerings;
(ii) the acceptance of SumTotal's software suite and future product
offerings; (iii) unknown errors or bugs in SumTotal's software suite;
(iv) the inability to fix in a timely fashion unanticipated bugs,
errors or defects that materially impact the functionality or
usability of SumTotal's software; (v) the ability to successfully
implement SumTotal Systems' solutions; (vi) the ability to
successfully address technological developments and standards; (vii)
the level of corporate spending and changes in general economic
conditions that affect demand for computer software and services in
general which may disproportionately affect the market for SumTotal's
products; and (viii) other events and other important factors
disclosed previously and from time to time in SumTotal's filings with
the Securities and Exchange Commission, including its annual report on
Form 10-K filed on March 16, 2007, its quarterly report on Form 10-Q
filed on May 9, 2007, its Form S-3/As filed on September 28, 2006, and
October 2, 2006, and its Form 8-Ks. The forward-looking statements
contained in this release are made as of the date of this press
release, and SumTotal does not assume any obligation to update such
statements to reflect events or circumstances occurring after the date
of this release.

CONTACT: SumTotal Systems, Inc.
Media contact:
Bill Perry, +1 614-975-7538
bperry[at]sumtotalsystems.com
or
SumTotal Systems, Inc.
Investors contact:
Gwyn Lauber, +1 650-934-9594
glauber[at]sumtotalsystems.com