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The Future of SAP HCM Consulting and SuccessFactors – 2012

SAP recently released their first public product roadmap on their acquisition of SuccessFactors and I provided my initial thoughts in an article titled SAP and SuccessFactors Roadmap Analysis. A lot of people have reached out to me worried about the future and trying to understand what this means to the overall SAP consulting market.


In an attempt to clear up some of the confusion I reached out to some well known SAP HCM Industry Experts, SAP Mentors, SAP Press Authors, HR Expert authors and Conference speakers that I know personally and trust would give an honest and no BS opinion in their respective areas. Enclosed were their thoughts on what the recent roadmap announcement means for each of major areas of SAP HCM consulting:

Core HR (Payroll, Time, Benefits, PA, OM) – I reached out to Steve Bogner who is Managing Partner at Insight Consulting Partners and he told me “It’s good to see SAP deciding to make bold investments in Employee Central. SAP has years of experience in core HR, offering a global solution and having expertise in localizing it for over 50 countries. That depth of experience can be applied to Employee Central and make it a very rich product. I’m curious about the transition path SAP will provide for on-premise R3 HCM customers to move to SuccessFactors Employee Central. The move to SaaS HCM is undeniable, and many of SAP’s core HCM users will make that transition – some sooner than others. What incentive will they have to move to SuccessFactors vs. Workday? SAP has a real opportunity to preserve their client base by facilitating this transition – making it easier, predictable, and effective. For consultants, this means there will be business in R3 core-HR for the foreseeable future. New R3 implementations will still happen, and customers who transition from R3 to Employee Central will require assistance with the R3 part of it. As always, consultants need to focus on how they can provide value to their clients, regardless of the underlying technology.”

Enterprise Compensation (ECM) – I spoke with Brandon Toombs who is a well know ECM expert (along with other areas) and owner of Toombs Consulting who told me “With respect to ECM, it is an interesting case because SAP’s is actually quite strong and flexible relative to SuccessFactor’s ECM, so I expect existing ECM customers or those with in-flight projects will probably proceed down the path they’re on.  Customers that need a solution in place within the next 1-2 years will also probably be safe in utilizing ECM as it will remain viable for at least a decade.  Those who can use SuccessFactor’s ECM solution today or can wait until for the promised integrated solution will probably do so.  For consulting, this obviously reduces the number of opportunities which will likely go to the senior level resources with solid consulting skills.  In my experience, great HCM consultants consider themselves HR process experts first.Technology changes over time, but the need to marry tech with great people processes does not.  Those consultants with the skillset and experience to deliver will remain in demand.”

eRecruiting – I spoke with Mark Ingram who owns  Ingram Talent and in a past life was the Product Manager of eRecruiting at SAP and he told me “Consulting in the area of recruiting involves problem domain specific skills from recruiting processes, organization, and strategy. It also includes technology product-specific skills relating to best practices, pitfalls, product capabilities including product gaps and how to overcome them, actual implementation of specific technology products. SAP E-Recruiting is a very technical and implementation-heavy solution compared to SaaS vendors (this can be good and bad). Tying business objects to recruiting activities, activating internet applications, and writing functional specifications for brand new recruiting applications are things that are not usually done by SaaS consultants.  There are consultants in the SAP market that know how to get E-Recruiting up and running, but there are not many that can apply the recruiting business domain skills. This is the opposite of what I see in the SaaS market. I have friends that came over from the Talent Acquisition group within an organization to consulting, and picked up two or three different Applicant Tracking System (ATS) skillets to solve client problems. Technology in this case is just a tool that is applied, along with business domain knowledge to solve a recruiting problem. Though there will still be clients that need an on premise solution and the related technical skills, in general I see recruitment domain knowledge valued over technical skills in the future. For SaaS deployments, rates for consultants will be based more on recruiting industry experience, along with which ATSs you have used. The exception to this will be in the middleware integration space, where technical knowledge will always be needed.”

Learning Solution (LSO) – I spoke with Sharon Newton who was a co-author of SAP Enterprise Learning and the CEO at hyperCision who told me “The acquisition of SuccessFactors is giving our customers a great opportunity to evaluate what they’re really looking for in a learning management system (LMS.)  I think there is a business case to be made for on-premise LMS implementations, such as SAP Learning Solution (LSO), particularly for customers looking at global roll-outs, regulated implementations or tight integration to SAP systems.  Likewise, there’s an equally valuable business case for implementing an on-demand learning management solution for such reasons as faster rollouts, elimination of up-front capital expenses, and the ability to stay on the newest platform with all the benefits that entails.  Plateau – now SuccessFactors Learning – has historically been a well-regarded LMS.  Some of the learning activities that have been shared showing Jam and SuccessFactors Learning working together are exciting.  Nothing, however, limits an organization from leveraging JAM with the Learning Solution (LSO), and the published roadmap for LSO has great functionality planned for delivery this year.  Really, this acquisition opens up so many options for our customers! Our job as consultants will be to provide our customers with the best possible advice we can in terms of decision making, project planning, and project implementation as it relates to their business requirements – just as we have always done.  To continue to do this effectively, we’ll be bringing all our existing tools to the table regarding core SAP HCM expertise, content integration practices, learning and talent management best practices, and regulatory training knowledge and, soon enough, a thorough understanding of both SuccessFactors Learning and LSO.  As SAP Consultants, we will always need to keep up with new technologies, best practices, standards and complementary solutions so we can give the objective advice our customers need to make the best decisions for their business.”

Talent Management and Nakisa – I spoke with Luke Marson who is writing an upcoming SAP Press book and a well known Talent Management Expert working for Gavdi and he told me “There wasn’t a great deal of surprise for me. We knew SuccessFactors was going to be the on-demand solution and we’ve known since EhP5 that no new significant enhancements (“innovations”) were going to be delivered to Talent Management. EhP5, EhP6 and EhP7 had and will only have “selected innovations”, irrespective of the purchase of SuccessFactors. For existing on-premise or potential Talent Management customers it doesn’t mean a great deal in the next 12 to 18 months; there is no real integration between SAP and SuccessFactors and the SuccessFactors Talent Management solution is not configurable to the same degree that SAP HCM and SAP Talent Visualization by Nakisa (STVN) are. If customers want a plug-and-play, easy-to-maintain system then SuccessFactors will be for them, but if they want a robust, customizable, manageable solution then on-premise is going to be the suite of choice. It is also worth noting that Nakisa are taking more of a role with innovation in the Talent Management space for SAP and I see this as an opportunity for them to up the pace in this domain. I expect Nakisa to look towards moving into the cloud, particularly as their applications are web-based and can handle multi-tenancy scenarios. This will keep them in a good position while at the same time forcing SuccessFactors and SAP to innovate further. I think in the short and even mid-term there will be no change for consultants working with SAP HCM Talent Management or Nakisa solutions. Some consultancies may find an increase in on-demand work, with a possible reduction in on-premise work, but I’m still not 100% sure all clients will want to move to on-demand. There is also a significant on-premise install base that will move to Talent Management and will want to leverage their investment in SAP HCM – which is likely to be on-premise. There will definitely be more Talent Management implementations over the next 5 years, but until the SF solution is flexible and integrated and more clients are using on-demand then I think a majority of implementations will be on-premise. In the long-term I think there will be a shift towards on-demand for sure – I think we all know that – but to what extent is difficult to predict right now. It definitely isn’t the death of on-premise, but it is certainly the dawn of a new co-existing arena for Talent Management. In terms of Nakisa, the product life depends entirely on the life of SAP HCM on-premise – and it won’t go away in the next 10 years. It will diminish, but if Nakisa move on-demand then there should be no change in the long-term.”

Performance Management – I spoke with Jeremy Masters who is the author of four SAP Press Books and managing partner of Worklogix who told me “As we recently heard from SAP, the on premise employee performance management solution will continue to evolve with selected innovations. These functionality improvements will continue via SAP’s current enhancement package approach since on premise customers will (continue to) demand improvements with the product. With SuccessFactors now a part of SAP’s portfolio, this means new (and existing) customers have a cloud option available as well for employee performance management. So what does this will mean for SAP HCM consulting, specifically in the performance/talent management space? Immediately not much; though, over time, consultants will need to learn and articulate the options between on premise and on demand/subscription-based solutions. As customers justify (or reject) the business case for putting Talent Management in the cloud, SAP HCM consultants will need to re-tool and master important aspects of these types of implementations including integration, security, master data management, data flow, and reporting. As is today, the broader and deeper the consultant, the bigger the impact (and success) this consultant will have with their clients.”

ESS/MSS – I spoke to Martin Gillet who is the author of two SAP Press Books and a SAP Mentor who told me “HCM Self Services will still made available to customers and SAP has invested quite great deal of time and money in enhancing the User Interface (UI) for end users. Many enhancements have been delivered in Ehp5 and Ehp6 which are looking promising. With the recent acquisition, I would say that the main new challenges will occur in the Talent Management suite (which is in my humble opinion wrongly named as it should be Career Management) and As mentioned by my peers, much is expected in the field of e-Recruitment, Learning solution, Performance and Compensation management. I would personally hope that these new challenges will also influence SAP in the conception of new Self Services as most of the current services are the ones that were delivered at the very beginning of online services, back in the Internet Transaction Service (ITS). Above all these matters, I truly believe that the main challenge will be to deliver consolidated consistent services to the end users, without User Interface (UI) pitfalls and most important without disruption. For consulting, this obviously meand that consultants need to exit the ‘technology watch mode’ and get a grip at the new functionalities, not only to understand the helicopter wide overview, but also to align customers processes against these and most important to apprehend how to configure these. These consultants with high integration skills and already in the new functionalities mindset will definitively be the first resources customers would look at. Besides consulting, I also expect customers to request an audit of their current system and bring consultants for advice and ‘how to tips and tricks’ to get the best of the new SAP products & functionalities.”

SAP HCM Technical – I spoke with Chandan Gopalani who is a partner with EIC Experts and he told me “The partnership of SAP with Success Factors is exciting news for SAP customers. From a development consulting perspective, there will be an increase in demand for HCM developers in the short term as customers begin the migration from on-premise to cloud based solutions. However, in the long run, that demand will reduce significantly. On one hand, there will be a reduction in on-premise clients and on the other hand, cloud based solutions will require less customizations and technical resources. In such a scenario, the developers who are diligent and enhance their skill-sets with new technologies such as cloud-based computing, mobility development, and in-memory computing, will outlast the pack and emerge ahead of the game.”

I believe there is a delicate balance within the SAP HCM Consulting market and although there will continue to be pockets of strength the combination of the product roadmap being squarely focused on SuccessFactors, continued off-shoring, faster implementations (RDS) and competitive threats such as Workday make it very likely the OnPremise SAP HCM consulting market is headed for a real slow down. If you want to stay current on all the major developments as they unfold I would recommend joining the SAP and SuccessFactors group.

There was a great quote recently by Naomi Bloom who is an HR Technology thought leader and owner of Bloom and Wallace that is very relevant for this discussion “Consultants, at least in my world view, are individuals who are able to study a business problem and, regardless of any particular technology choices, guide the client to the best possible approach to achieving the desired business results.” At the end of the day, if you are a consultant that is able to provide value for your customers then it won’t matter if you are working with SAP, SuccessFactors or any other underlying technology as you will be successful.

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  • The SAP gravy train has entered the station. It has been a good 15+ year run. Gone are the days of $100+ per hour and even much more. The reason, and only reason people paid these amounts was because of what consultants could do with the SAP product. Take payroll with it’s cycles; schemas; processing classes; tubs; tax models etc. etc. No one would pay someone who is an expert on payroll processes that type of money. Glad to see everyone here is positive but I think the game is over. Why do you think so many people got into SAP? Money. Why be a SVP or higher at a company to make 200K when you can be a payroll (insert your module here) consultant making $100+. Hope you all saved for a rainy day and did not go out to buy that new Ferrari. As I have said. SAP is not life or death, yet consultants were paid as if it was. It has been a great ride. Will the last person off the train close up shop. Thanks
    • Thank for the comment Howard and it is amazing the staying power that SAP has had as skills such as payroll for example have been “hot” for 15 years and I am a used car type of guy so no Ferrari in my parking lot either 🙂

      I have a few different points of view.

      1. Being an expertise in the business process and the technology was a common theme throughout each of the industry experts analysis and I would challenge you that those are the people that will always be in demand at premium rates.

      2. Per your comment “Glad to see everyone here is positive” – I said ” the combination of the product roadmap being squarely focused on SuccessFactors, continued off-shoring, faster implementations (RDS) and competitive threats such as Workday make it very likely the OnPremise SAP HCM consulting market is headed for a real slow down.” which doesnt seem that positive to me 🙂

      3. In my opinion SAP Payroll will have the most strength of any SAP HCM On Premise module as it will be the most difficult to build out in EE Central due to the complexity and its huge existing install base with no real reason to migrate or change.  To top it off SAP Payroll is one of the strongest solutions in the marketplace.

      Be curious to get your take.

    • Thanks Vinod as I am lucky to have a lot of smart friends who provided their insights on areas where they are true experts.  It will be interesting to revisit this a year from now with an updated version as things are changing very fast.

  • Hello Jarret,

    Thanks for such good article. It helps to understand the concept of successes factor and SAP and Also.

    Waiting for more blog post on the same topic.


    • Hi Fuad

      Thanks for the kind words as glad you enjoyed the article and we have an updated version planned to be released in the next month as the market is changing very rapidly.


  • Great article- concise and valuable. I think the SAP HR/HCM consulting market has been trending down in the last few years due to its maturity, influx of commoditized technical consultants, and the growth of alternatives. Your information supports this as well. Developing a broad HR/HCM domain knowledge and skill set along with the ability to leverage any system or technical solution will be the key to success. Focus on any single technical solution will no longer be sufficient. I think this has been a trend that is now accelerating with the changes in the delivery models of software. Understanding how to deliver innovation in the HR arena will ultimately be more valuable than the ability to configure any specific set of tables.