SAP issued the following press release this morning: SAP and SuccessFactors Accelerate Unified Product Direction which covered their product direction across core HR, Talent Management, HCM Analytics and Integration and I thought I would outline my initial thoughts on each of the main points.
Product Direction Across Core HR, Talent Management, HCM Analytics
- SuccessFactors Employee Central solution is the go-forward core human resources (HR) offering in the cloud. Backed by more than 25 years of experience from SAP in core HR, the solution is poised to grow exponentially as SAP will boldly invest in it. SAP will continue to offer the SAP® ERP Human Capital Management (SAP ERP HCM) solution on premise for core HR, now with regulatory support for 51 countries around the globe and an innovation road map of significant investments in functionality, user-experience, mobile and in-memory technology capabilities in the future. My Take – Pleasantly surprised as it appears that SAP is going to build out Employee Central and finally have a large enterprise cloud offering to compete with Workday and other cloud based competitors. When you hear “bold investment” I equate that to a major commitment and it will be important to get clarity on the timelines on when customers can expect enhanced functionality. My understanding in talking with industry analysts is that Employee Central has about 100 customers though needs to be built out further to support larger customers. In addition for SAP to truly have a full HCM cloud solution they will have to build out or partner in areas such as Payroll, Time Management and Benefits.
- For talent management, SuccessFactors Performance Management, SuccessFactors Compensation Management, SuccessFactors Recruiting and SuccessFactors Learning Management with social learning from SuccessFactors Jam will be the go-forward solutions. Talent management components from SAP ERP HCM will be continued with selected innovations for the next decade. My Take – Pleasantly surprised and commend SAP for providing clarity that the SuccessFactors solutions will be the “go-forward solutions” as I believe that is the right course of action. The On-premise talent management solutions such as Performance Management, Enterprise Compensation Management (ECM), eRecruiting and Learning (LSO) will continue with “selected innovations” which says a lot as well as it is obvious the investments will be minimal in these areas. It is important to note that each of these has had a lot of new functionality released in enhancement packages (EHP1 -EHP6) and are very solid offerings.
- Analytics will continue as an important focus area within both SAP ERP HCM and the SuccessFactors product portfolios, leveraging significant assets such as SuccessFactors Workforce Analytics, SuccessFactors Workforce Planning, the SAP HANA™ platform and solutions from the SAP® BusinessObjects™ portfolio. People analytics will be revolutionized by putting SuccessFactors Workforce Analytics on SAP HANA. Together SAP and SuccessFactors can make unparalleled aggregate HR benchmark insights available in the cloud to hundreds of thousands of customers. The combination of SuccessFactors software and SAP HANA is one of the key priority areas for development of the BizX Suite, as it will help increase customer value by dramatically speeding existing processes, enabling access to large amounts of data in shorter periods of time and providing real-time access to information tailored to individual requirements. My Take – It is no surprise to see that SAP plans to focus on getting the BizX Suite up and running on HANA especially given the announced plan that the Business Suite will be available to run on HANA by the end of 2012. I will need to get a little more clarity on what the marketing jargon “unparalleled aggregate HR benchmark insights available in the cloud ” really means as it is a important area for customers.
Open Integration for All Customers
- SuccessFactors will continue to support an open approach to connecting with third-party solution providers. Approximately fourteen percent of SuccessFactors customers currently run their systems side-by-side with SAP. In addition to providing enhanced value for joint customers, SAP and SuccessFactors will accelerate the development of integration solutions with third-party solution providers. For SAP customers, the two companies intend to deliver integration packages between the two offerings: Cloud-based talent, core HR, recruiting, learning and social solutions, and workforce planning and analytics solutions from SuccessFactors; and On-premise core HR from SAP. My Take – As expected SAP will deliver integration from SAP On-Premise to Successfactors and in talking with customers this is one of the most important items and will be a significant undertaking. On a side note it will be interesting to see how the “social solutions” meaning Jam are integrated with On-Premise and what that means for StreamWork in context of HCM as it was on the roadmap to be incorporated in certain areas.
Overall I am impressed as it appears some tough decisions were made especially in some of the areas where there was product overlap between SAP and SuccessFactors. I would have expected to see clarity on Career OnDemand as well as some reference to mobility given that it is one of SAP’s core 4 areas of focus but it is not the first time communication has lagged on the mobility side. The bottom line is I think it is a great start given the deal was only made official last week. I would expect SAP to provide customers a more detailed roadmap and timeline at the latest by Sapphire and if you want to stay current on information I would recommend joining the new SAP and SuccessFactors Linkedin Group. One of my favorite quotes is by Walt Disney “The way to get started is to quit talking and begin doing” and many people will be watching to see how quickly SAP can deliver on their prpmised roadmap.
I am not sure why there is surprise about sf been built out. If SAP did not do this, they would never be able to compete for new clients against workday et al. It appears to me, that with sap not expanding tm in onpremise (if that is the correct inference), that means they want their customers to use a hybrid approach – on premise (sap) for core and on demand (sf) for talent using integration tools, maybe netwaever gateway??. I think customers not wanting to go to cloud for non core got a kick in the gut. Also, the consultants that specialize in talent may be in trouble here if they do not retool. My 2stomach euros
Good points Jarret. I have mixed feelings as someone who makes a living as a TM On Premise consultant but this certainly can’t be that big of a surprise to anyone. I do feel there will always be some customers who don’t want a cloud solution and agree with your comments on the latest Enhancement Packs. I’m currently working on an EhP5 implementation and think the compensation functionality compared to what’s in SF is actually superior. And in my opinion, if you’ve got core HR or TM in place, then the additional overhead to maintain some of the components in TM is minimal (at least for Performance Management and Compensation). Will that cost be greater than implementing a SF solution?
Howard – Thanks for the comment and what surprised me was that SAP made the commitment from day 1 to build out EE Central and build a product that will ultimately compete with On-Premise HCM and the Workday’s of the world. I personally believe it is an extremely smart long term move for SAP and you are correct that for customers not wanting to go fully to the cloud for Core HR (once it is built out) there are two options….use SuccessFactors with a hybrid approach and a fully supported interface from SAP or use the onPremise products (ie LSO, ECM, eRecruiting, Performance Mgt) which current offer some very strong functionality though knowing they will not be enhanced that much further.
Hong – Thanks for the comment and I plan on a follow up article on what this means to SAP consulting in these areas but my initial thoughts are for extremely experienced folks like yourself there will be lots of work for many years as customers will still chose the onPremise offering. That said at the middle and junior level experience this news should have you rethinking and retooling your skill set. As far as SAP ECM goes it was recently rated in the Forrester Wave report as the best solution among the major 7 vendors with 5.0 score which I agree with and lets not forget SAP has invested heavily in the last 3 years on bringing new functionality to their Talent Management/Performance Mgt/ECM/LSO/eRecruiting OnPremise products. You bring up a great point about the overhead and a lot will depend on how “seamless” the standard integration SAP builds with SuccessFactors is to determine the option that makes the most sense. The last point is cost/licenses as some of the products such as ECM and Performance Management are included in the base user license if I am not mistaken while there will be additional costs for SuccesssFactors so that could be another factor.
There are many organizations those are using SAP Applications to enhancing their business management process. Major manufactures of SAP Applications are providing this worldwide.