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As the groundswell of activity around Enterprise Performance Management continues to build I have begun to see more and more inquiries around tying Corporate Strategy and the tracking of Goals, Initiatives and Key Performance Indicators (KPIs) with individuals and their personal incentives within the Human Capital Management (HCM) suite.  This makes perfect sense because one of the key to requirement to having a truly aligned organization that is executing against the corporate strategy incentives for the individuals need to be directly tied to the execution of the corporate strategy.  Often these incentives and personal goals are tracked within the HCM suite whereas corporate strategy is tracked in strategy management applications such as SAP Strategy Management (SSM).  So how can we tie these two together?  I will break this down by looking at this from two perspectives; first the management layer within organizations and second the individual contributors.Often management (C-Level down to middle managers) has a portion of their compensation linked to the performance of their particular level; for example an Executive Vice President of a particular Line of Business (LOB) may gain additional compensation for hitting particular revenue goals, particular margin goals, or turnover rates within their LOB.  These metrics often become KPIs for that LOB’s strategy and/or scorecard.  To this point strategy is more often than not tracked at corporate, LOB, and team levels/contexts within organizations so the linkage between our E-VP in HCM and the LOB level is typically easily defined.  The initial contributor level is little bit more difficult for a few reasons.  1. A large majority of organizations who have deployed Strategy Management have not cascaded the corporate strategy down this level.  This is mostly a result of time and scope of needing to get all of the LOBs, Divisions, Teams etc. implemented.  2.  The goals of the individual are often more so activities that align to the team, division, LOB and corporate goals.  3. These activities are not always easily translated into KPIs and are to certain extent are subjective.  For example a few of my objectives are:

  • Identify high-level requirements for SSM 7.5 based on mix between visionary innovation, integration, competitive and customer-requested enhancements. 
  • Deliver functional specifications in SRS documents for SSM 7.5 with expected quality, delivered on time per the PIL Process with market validated functional capabilities
  • Support 8.0 suite strategy with high-level product specific themes for SSM.
  • Support the overall development organization on an ongoing basis in helping to do whatever it takes to deliver on shared goals by facilitating or assisting with critical processes, solution validation, ramp-up, quality test case preparation, localization, and customer escalations.

These are all worthy and important goals for me but how do I measure them and share the relevant information with HCM?  In addition some of these are cross functional objectives which I will rely on team members to help me accomplish.  One option is to cascade SSM down to me as an initial and set up binary KPIs for some of these to be entered by my management team.  This is definitely where SAP is headed in our own internal deployment but we are not their yet.  Another option is to leverage the Initiatives component of SSM in which I enter the set of activities and milestones that I will be executing on and link those Initiatives back to my Team, Division, Organizational goals.  This allows me to track my and the team’s activates directly related to our goals.  With this approach I have the ability not only to track schedule status for thing like producing the SRS document referenced above but I also have the option of measuring the status of the Initiative as a whole by setting a subjective status or directly linking it to a KPI on the team/division scorecard.   How do we share performance data between the SSM application and HCM?  One option is to go back into the database tables and move the appropriate performance data that is required in HCM…this could be complex and difficult.  The second option is to leverage the pending SSM Web Service and the Services Oriented Architecture of the ERP/HCM platform.  Simply select the appropriate data run it through a custom developed XSLT and load into HCM.  We do have plans to make this a more formalized option in an upcoming release but in the meantime I believe this is the most appropriate approach. 

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  1. Umesh Biyani
    Dear Mike,

    I have visited no. of Customers showing them SAP – Strategy Management component. One item which they are looking for is linking of SSM components with Rewards Management system. Thanks for addressing this point. We will wait for next releases of SSM where in we’ll have full Integration with Rewards Managements system.

    Regards,

    Umesh

    (0) 

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