Gartner report on SAP’s HCM strategy, post SF acquisition
I had the opportunity to read the Gartner report on the “Impact of SF acquisition on SAP’s HCM strategy”, over the weekend. Just like other anaylst reports, this is well written.
While many of the points mentioned in the report are well known (such as SAP’s go-forward technology for Talent Management will be SF), the report provides recommendations to customers such as, customers should ensure that SF products meet the majority of their needs, customers should consider SF TM modules against other alternatives available in the market. Other observations are, over 60% of SF customers were not SAP customers, concerns of the customers that the acquisiton will slow the progress of SF development.
Later, the report specifically mentions about the integration between SF and SAP HCM. The report mentions that the integration is not as simple as it seems and tighter integration will happen in the next few years time. To quote from the report “Historically, SAP has marketed engineered integration as a key competitive advantage and it is a cultural loadstone. The acquisition spree is a fundamental shift for SAP …. , in effect , trading integration and technical consistency for usability and speed to market”.
A customer of mine, who is planning a LSO implementation early next year, looked at SF LMS vs SAP LSO. They decided to stick with SAP LSO primarily for the same reason — how will the integration happen, and how tight will it be.
When SF was acquired, there was tremendous excitement, but over the past several weeks, we are seeing many queries regarding integration and product roadmaps.
I believe, the first wave of integration (which might be offered as Rapid Deployment Solutions) will involve SAP PI, and later releases will see greater assimilation and tighter integration with SAP HCM. For customers who do not have SAP PI in their landscape, how will the integration look like – any technical developer can write a wrapper and provide the integration. But, a customer who is investing in a new technology will have higher expectation than this. Early this year, a large customer (with a global footprint) mentioned they are planning to do aways with SF Performance Management, because of the integration challenges with SAP HCM on-premise. Later, they did sunset the SF application and went live with the on-premise SAP HCM PM.
Last several weeks, I have been looking at SF and getting my hands dirty. My initial observation about SF is, they do not have same level of functionality that the on-premise solution offers. Where does SF score — better usability, presentable UI and plenty of bells and whistles. It will require large budgets and investments to make SF TM modules offer the robustness that SAP HCM on-premise provides.
In my opinion, the success of the SF acquisition will largely depend on the integration with the on-premise solutions, and increasing the functionality that SF currently provides. The bigger challenge will be, if the excitement about cloud offerings wanes and customers begin to pull their cloud solutions back to on-premise. Technology innovation have always been cyclical and I expect something similar to happen within the next decade.