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Email, Twitter, Facebook, ASUG, and SCN were all buzzing this morning with news of SAP’s weekend announcement that it intends to acquire SuccessFactors, the market leader of cloud-based human capital management (HCM) solutions.  Why all the buzz?

Well, for one, there’s been a showdown taking shape between Workday (HCM onDemand solutions that are quickly gaining a foothold in the HR and Payroll arena) and SAP’s on-premise solutions.  For those of us already mired in the daily management of an SAP system, we’ve watched this confrontation taking shape, wondering what the ultimate impact to our own SAP systems might be.  As “cloud” and “SaaS” begin to root themselves in popular technology conversations, Workday is an increasingly attractive option for capital-strapped companies.  Will SaaS eventually overtake our on-premise tools leaving us scrambling for challenging opportunities with cloud-based computing companies instead of applying our creative expertise to our own company’s issues and business cases? 

Several of us in the ASUG HCM Community are already very familiar with SuccessFactors – since we work for companies who utilize SuccessFactors for performance management and recruiting.  It’s no secret that SuccessFactors is one of the most popular “best in breed” solutions for Talent Management.  So, now what?  How will current implementations of SuccessFactors be affected by this new alignment with SAP?  There are exciting possibilities for those of us skilled in SAP HCM – although these possibilities will likely take years to evolve.  For the short term, we expect that SuccessFactors will operate just as it has been.  Then what? 

And what about Nakisa, the visualization tool that has made SAP a clear leader in on-premise Performance Management and Succession Planning tools?  How will Nakisa fit into this new model?  Will SAP continue to build on-Premise solutions for Talent Management that utilize Nakisa?  It’s likely the answer to this is a resounding “yes.” 

Then there’s Career onDemand – which I Necessity, Scotch Tape, Rubberbands (or how innovation accelerates) about several weeks ago.  Career onDemand represents SAP’s investment not only in the Cloud, but, more importantly, in development driven by customers.  The new SAP of recent years is agile, entrepreneurial in attitude, and customer focused.  And the latest enhancements they are delivering to their on-premise tools demonstrates that.  I believe SAP has the talent and expertise to continue building their own superior cloud products and with the acquisition of SuccessFactors, they are adding the human talent and new technology which will combine to make SAP an even stronger leader in the HR technology market.

The acquisition of SuccessFactors will no doubt help SAP accelerate it’s SaaS strategy [FORBES: SAP+SuccessFactors: A Good Day for the Cloud].  What we are all waiting to see is what’s in it for us.   Whatever “it” is, it’s sure to bring new opportunities for companies to maximize their existing SAP on-premise solutions, for SAP experts to learn something new, and for organizations to have another reason to choose SAP.  There’s more to this than meets the eye.  There will be more than performance management to think about with this acquisition.  Over the next few weeks, the story is sure to unfold and the capabilities SuccessFactors will bring to the table will crystalize.  We’ll all be chatting about this around the water cooler for at least a few days yet. 

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  1. Jarret Pazahanick
    Hi SherryAnne

    Great to see you chime in with your thoughts and it has been a pretty exciting and eventful week for SAP HCM. It is also nice to see HR Technology be the lead story in the the Enterprise Software industry.

    I pulled together some of my thoughts earlier this week in a blog called “SAP and SuccessFactors Acquisition Q&A” that you might find interesting

    http://www.sdn.sap.com/irj/scn/weblogs?blog=/pub/wlg/27651 [original link is broken] [original link is broken]

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