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SAP HCM -> SuccessFactors: The consulting model. What about the little guys? Can we play too?

Is this just a game for the big boys?

Today I read that Deloitte have just joined up with SuccessFactors to become a

“Strategic SuccessConsulting” member in the SuccessFactors Partner Program.


Great! Only I don’t mean great really. Why is this? Well, basically it is because I can appreciate how much I want to be involved in the new and exciting moves that SAP are making with SuccessFactors, (just read my last blog on the topic) and yet I really don’t want to work for one of those large consultancy firms again. Yet, because of the relative immaturity of the market, if I were a customer looking to implement a SuccessFactors solution – I’m going to go with someone that has that rather cool sounding name.

Looking Back on SAP HCM Consulting

I remember, years ago, how large consulting firms dominated the SAP HCM market. Today, there seems to be a much healthier distribution (in Australia at least from what I can see) between large firms capable of servicing huge multinationals, down to smaller firms that offer more specialist advice. The clients I work with seem to appreciate this too. They didn’t like that large consultancies in the past would use them as training grounds for their consultants – and that this was just expected. The number of bodies on the ground would be very large for what was supposed to be a simple solution. Today, with a maturity in the market, small teams of “experts” can often provide a much cheaper/better experience – especially as the smaller companies are going out of their way to attract the real talent. With social networking as prevalent as it is today – customers are even able to seek out the talent that they want to work with them. They are able to do this because that talent has been around a while and people know who they are and are networked into the talent.

However, now we’re in an interesting situation. Some (ex-SAP focused) consultancies are leveraging their “knowledge” about HCM as the reason you should trust them. Others are signing large partnership deals, like Deloitte (goodness knows who is making/taking money here, but I’m sure it isn’t just handshakes that are getting traded) (please do correct me if I’m wrong here!).  But individuals are going to have to work even harder to throw up a hand to say – “Hey, I haven’t got a lot of experience, but I’ve been able to solve stuff for you in the past…” . The networks and experience that have been used in the past are suddenly next to meaningless – out goes the consulting 2.0 model, and back to the big sales pitch.

Where to now?

It is going to be a interesting few years for smaller consultancies who focus on hiring and retaining the right people, rather than the bigger consultancies, who (in my extremely cynical experience) focus on making money. In the end, I hope that having the right people will mean that we (the smaller consultancies) can adapt, learn and add real value. After all, I wouldn’t hire someone based on their skill (that would be IMO too short sighted), instead I like to focus more on their ability and desire to learn new things.

From Big to Small

When I look back to how the smaller SAP HCM consulting firms have taken market share from the bigger ones, I don’t see that shift (until recently) having been helped by SAP. However, especially in the last few years I’ve seen that momentum change. It’s even more obvious now with SAP  offering free developer licenses for HANA and the mobile platform, really encouraging individuals and small developers to become part of the solution.

I hope that SuccessFactors as part of SAP sees the value in encouraging smaller niche players into their market and doesn’t just keep the door open for the big players. It would be lovely to see a “Discovery Consulting joins SuccessFactors as Successtastic Implementation Partner” headline on the SuccessFactors blog – but obviously the market doesn’t care about that and would probably take a dismal view of SuccessFactors “wasting” time with the little guys. But some bones thrown our way would be really appreciated 🙂

Thanks for listening

Finally – I’m not 100% sure that this is the right space for this blog – but lacking any specific SuccessFactors area in SCN, it’s were I’m putting it. Please let me know if you think there is a better place (within SCN). Thanks!

Please note that even if I work for them none of my views should be taken as representing my employer – these are my own badly formed ramblings, not theirs. I really should come up with a better disclaimer, yet it’s much more amusing to write a fresh one each time I post. If this rambling in the disclaimer bothers you, I’m amazed you managed to make it this far in the blog. And if you’re still reading – thank you! What do you think, am I being overly cynical, does cloud mean just too big a shift in doing things for SAP HCM people to move to?

21 Comments
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  • Chris - interesting topic.

    HCM is a big process where you have different levels of inter-action.

    Large SI's want the big chunky transformation projects which in the case of HCM could involve different teams, Tech, Shared Service, Consulting (advice) etc.

    It could be that HCM leads the other processes - some would say Purchasing or Sales are taking the lead - but I am not best placed to comment there.

    What I would say is that Finance will chug a long at the back of the queue (around cloud). Lots of the recent Finance releated purchases from SAP have been well integrated providing opportunties for large and small SI's alike.

    • Thanks for your comments Mark,

      I'd agree - the larger consultancies are after the big projects - it where they can justify the expense/profit/margin for the idea that they can handle every aspect of the solution. These guys are driven by the need to generate profits - and those sorts of projects tend to give better margins. I do see that we will see some backlash against some of the larger firms, as they will no longer (in a less technical/development, more functional) cloud world, no longer be able to reduce their implementation costs by off-shoring a lot of the development.

      What concerns me is that unless SuccessFactors takes a leaf out of SAP's recent play book, and starts engaging at the lower levels (i.e. low cost training/development areas/systems) then we are going to be in for a few years of only high cost large scale consultancies offering anything in the SuccessFactors space. Please - I want to be wrong about that!

      HCM has traditionally been ahead of the curve in SAP technology stakes - in fact it's only HANA that seems to have passed by and gone for solutions where the ROI is clearer. The expectations of ESS/MSS UI have driven HCM to always use the latest solutions - pushing into the cloud with SuccessFactors being the logical next step. We'll wait and see what happens with finance!

  • Hi Chris,

    Like your blog. I kind of agree with Mark that large consult firms are after large transformation projects as large customers are, atleast in my experience, wary of entrusting a full scale transformation project to a small/niche vendor. They like the security large consult firns are able to bring.

    Having said that as cloud based solutions are more popular with SMB's, with cost being one of the drivers, I can only see more opportunities coming for small / niche vendors.

    My two cents.....

  • Hi Chris,

    i couldn't agree more and i feel your pain, but i wouldn't want to go through another 30-day teaser sign-up period only to find out on day 29 that i don't really understand the new solution and need more access which i can't afford being a solo practitioner. rather, SAP should offer longer access periods, not just to anybody, but only to those who have proven their theoretical knowledge via certification. this way, you would prove that you are serious about the application and SAP would reward you with allowing extended sandbox access. this is true not only for HCM, but to other applications like: ByD, SF, BPC, Ariba, etc.

    my 3 Groschen

    • Hi Greg,

      I like the idea - although I'd not link it with certification (my thoughts on which really belong in a different series of blogs,)

      Just like SAP has done with HANA - they should be making the material and access available for the cloud solutions. No productive access, but the ability to play/try out things. I don't think that this will lead to a slew of badly trained consultants (which I'm sure would be the fear) but it would go a long way towards stopping the larger consultancies charging a huge premium for SuccessFactors skills whilst the market is very scare.

      There was a discussion on LinkedIn which talked about the unavailability of freelance consultants in this space. I think there is a desire for them - it's just going to be hard to provide for it in the near future unless SAP/SuccessFactors decide to make it so.

      http://www.linkedin.com/groupItem?view=&gid=4278743&type=member&item=117270469

      Thanks for the comment and a good idea too!

  • Good blog Chris. I think there is room for highly qualified and experienced consultants in the SuccessFactors market, regardless of the firm size. Focusing on providing value to my clients and partners has served me well for the almost 20 yrs I've been working with SAP HR. I think that by networking with past clients and partners and continuing to focus on how you can provide value to them all is a good approach for moving forward. That approach will bring along opportunities, but it won't just happen - we have to work at it.

    • Thanks Steve. I agree with you, I think that there is a space for small firms. And I realise I'm going to have to work to be noticed (at least noticed for being useful in this space rather than being full of hot air). For me the issue is that I'm not exactly sure of what the way forward is here. I'm guessing that I should be reaching out to the SuccessFactors partner teams locally (as I type this, I'm filling in the partner details request form on the website. Let's see how it goes...)

      I'm not afraid of a little work - especially in this new and rather exciting space.

  • Hi Chris!

    I fully share your view that SuccessFactors should pay attention not only to big partners. And I have and have a unsuccessful experience with this. I’ve filled partner request form (as you did) for our 100 emp. SAP consulting and SAP Partner company 2 months ago. And still haven’t any reply. (even though they indicate month period as a maximum) Even that we have client  - 100k rapidly developing BRIC corporation that highly interested with SuccessFactors solution, didn’t help. – Escalation through Sales team haven’t worked – they just stopped to reply my letters. All I need – are just formalities with partner agreement and access to presales materials and demo system – and I can sell SuccessFactors solution to them, because it’s really valuable. But I don’t know what to answer our client now.. I would be very grateful to SuccessFactors team if I’ve received at least a short letter like "we are overwhelmed and haven't time for this" or “We are not interested with this client, please contact Oracle partners” or “We are not interested with business in your country”  or “We are not interested with your company as partner.  We recommend  company X” or “We don’t want want to deal personally with you, Vasiliy”. – And I would have some certainty. But all I have – silence … for months.

    Disclaimer: All of the above is my personal opinion, not my company’s.

    • My organization has about 175 consultants and we signed an agreement. It might be the territory you are in, local business practices or just that the partner channel are completely overwhelmed with work.

      Anyhow, I wish your company luck in getting a partnership.

      Best regards,

      Luke

    • Thanks Vasiliy - I really hope you too get the opportunity to work with SuccessFactors.

      I know exactly the position you're in. I've been recommending to some clients that they actively look into using SuccessFactors for some of their Talent solutions - knowing that at the moment this will mean them needing to be referred to the local big guys. I like to think that I will always do the right thing by my clients, but when that means sending business to the competition and for the only reason that they are bigger and therefore have been able to have a relationship with SuccessFactors, it really stings.

      Our tiny little consultancy firm with less than 20 staff is actually an SAP Partner - it took some work to get there - but we are! I'd hope that we can do the same with SuccessFactors.

      btw - ditto on the disclaimer thingy!

      • Chris, I wish you to keep value for client as the main priority. I'm sure it will lead your company to a continued success! (and to prosperous partnership with SuccessFactors as well)

  • Hi Chris,

    This is a great viewpoint and you may be surprised to see me get this far down your blog page (or maybe I just skipped over some text? 😉 ).

    I worked for a medium sized consultancy (under twice the size of than Vasily's) and we managed to sign a partner agreement. However, I'm not sure if the independant's or small boutique companies will get a chance. However, many of SAP's partner organizations do not do work with independant consultants so this is nothing new, it's just more important because SuccessFactors will fundamentally change how SAP HCM is delivered over the next 5 to 10 years.

    I for one will keep my fingers crossed for you.

    Best regards,

    Luke

    • Hi Luke,

      I really hope the you're wrong about small consultancy firms (and when I say small I mean Australian's small - i.e. less than 50 emps) do get the opportunity. Especially in the SMB market, these companies can provide real value - plus they tend to attract some of the best talent - because they are small and flexible and willing to work to a model that is much more "Millennial" compatiable (thank Karie Willyerd for embedding that term in my current thoughts).

      It would be shame for the cloud area of SAP to move in such a different direction from the onPrem guys (i.e. free developer HANA editions).

      We'll wait and see!

      • Hi Chris,

        I hope this is the case too, and I feel for something as impacting as SuccessFactors on the SAP HCM landscape that the "smaller" guys will get a look in. I just think it will be tough for consultancies or individuals to get project work or implement SuccessFactors without being a partner. I don't know if the partner model extends to individuals or contractors, but I surely hope it does.

        Best regards,

        Luke

  • And - another big player in the mix:

    http://www.successfactors.com/press-release/northgatearinso-partners-with-successfactors-strengthening-its-cloud-integration-capabilities

    <sigh>

    Well one couldn't expect NGA to just stand there and let SuccessFactors take away the value of euHReka without trying to claw some of it back! At least they can claim to be experienced in getting customers onto a "cloud" solution. (Seems NGA has similar definition of cloud to Larry - but that's a whole different debate for another blog (and I'm sure others have been there first)).

  • Very good article on an important topic. It is pretty obvious on a number of levels that SuccessFactors is the future and SAP has been pretty clear on what they are going to recommend to customers, compensate sales to push, and  innovate in the future. What surprised me a bit at SuccessConnect last week was how aggressively SuccessFactors plans to build out core HRMS (Employee Central) and combining that with Payroll & some 3rd party partners will also affect the SAP HCM market potentially quicker than I initially expected.

    It was also mentioned last week that SuccessFactors plans to have over 2K partners and they realize they have to do more with the partner ecosystem to support the work that will be coming. They are starting with the larger companies and the firms that jumped on the opportunity quickly which is not a surprise. What did surprise me in talking to a few SAP HCM firms (recent SF partners) is their SAP HCM customers who are starting to implement SuccessFactors are going with firms that have existing SuccessFactors experience as they arent interested in having SAP HCM consultants "learn on the job" even though the SAP SI has the existing relationship.

    There is a mad dash by SAP HCM SI's to transition to the SuccessFactors world and many will struggle due to not having the adequate business knowledge or ability to adapt to a new model of shorter projects.  I heard several stories last week of consultants working on 5-7 smaller projects which is not the typical SI model but something that independents would love which leads to....

    There is no opportunity that I have seen for SAP HCM independents regardless of experience to get training, certification without going through an existing partner and while there is a small SuccessFactors independent market the rates are quite a bit lower. That said several of true subject matter experts in the SAP HCM space are independent or work for small SI (that arent yet partners) so it is a very interesting time to say the least.

    On a side, I would highly recommend everyone check out Dennis Howlett interview with Narinder Singh as it is excellent and very relevant to this topic.

    http://www.zdnet.com/blog/howlett/inside-the-mind-of-a-cloud-consultant-with-appirio/4179

  • Hi Chris,

    Interesting discussion you have kicked off here.  As you know, my organisation has signed up as a partner organisation and from what I understand there had been a strong demand from a range of variously qualified and variously skilled organisations to get on board.

    Your comments regarding the larger SIs strike a chord.. and I also have been watching the various globals coming aboard over the last 6 months.  The fact that the delivery model is quite different in this space is the key.  SFSF emphasise the short delivery times of projects and lower technical effort resulting in 1 consulting FTE working on several projects in parallel, which is a big change from what we are used to in SAP consulting.  They also highlight the need for consulting around BPR and Change Management to support the adoption of what ought to be a turnkey solution, which is where the larger consulting firms can get involved.  The only challenge they would potentially face is their knowledge of the solutions but obviously all they need to do here is farm the technical work out to another partner...or buy a partner.

    So what should be a gamechanger in our SAP HCM world for the likes of us as consultants and our customers in terms of cost, etc could get overlaid with a significant layer of 'value add' business consulting... bringing the overall project costs back to a similar place where they have been in the past.

    I think there needs to be some focus maintained on the delivery approach of SFSF in partner land.  It would certainly be a backward step for customers if they were no longer able to rely on their trusted advisors who have served them well in the past or who they can only get to through a mountain of business process documentation and workshop minutes!

    In that respect, SFSF do appear to be keeping a tight eye on how partners are skilling up and I have to give them a tick of approval for their enablement program thus far, speaking only from my experience in APAC.

    Thanks for the blog.. interesting topic and I'm sure we'll hear more on it over the next 2 years!

  • hi- Very interesting topic. i like your blog. HCM is eally interesting and interecting process, which alway provide many opportunity at large and small scal industries.