There is no doubt that integration between SAP and SuccessFactors is the top priority for most SAP HCM customers. Over the past month SAP has released several blog on the topic such as Integration Technology Options and Licensing Info For Customers Using SAP HCM and SuccessFactors and SAP HCM integration with SuccessFactors BizXto attempt to add clarity to the various integration options that are available. Unfortunately customers have been getting a lot of mixed messages and incorrect information from the two sales organizations regarding licensing, costs and options needed to take advantage of the standard integrations that have been released and are planned for 2013. My goal in this blog is to set the record straight on where thing actually sit today.

SAP’s Strategy

Earlier in the year when SAP announced they were buying SuccessFactors one of the most common questions was What is your strategy to integrate SAP and SuccessFactors products? and enclosed was their response:

SAP and SuccessFactors have many common customers who use both solutions. These customers have been running systems side by side and the integrations between products are proven. However, in order to provide even better value for customers who want to leverage the market leading solutions from both SAP and SuccessFactors, we plan to build and deliver tightly coupled standard integration packages between the two platforms, considering multiple integration requirements:

      • Cloud-based Talent, Recruiting, Learning and Social solutions, and Workforce Planning and Analytics solutions from SuccessFactors
      • On-premise Core HR data
      • One way and bi-directional data flows

Reading that it seems pretty clear what the SAP/SuccessFactors vision was around integration and given that SuccessFactors founder and leader of the SAP Cloud Business Unit Lars Dalgard mantra is The Customer must win!” I thought I would take a deeper look at what technologies and costs will be needed for customers to achieve the level integration “promised” above as there are two core options.

Integration Options

One thing that is becoming clear is that NetWeaver will become the preferred integration technology for SAP OnPremise customers. The ONLY two options that support the more robust bi-directional integration (ie Compensation or Recruiting) between SAP and SuccessFactors are SAP NetWeaver PI OnPremise and SAP HANA Cloud Integration (scheduled to be released in Q1, 2013). If you are not familiar with these two options SAP’s Vice President of HCM Solutions Jean-Bernard Rolland does a good job explaining them in a recent blog:


    • SAP NetWeaver Process Integration (SAP PI) is SAP traditional enterprise application integration software used to facilitate the exchange of information among a company’s internal software and systems and those external parties. Before the current version, SAP PI was called SAP Exchange Infrastructure (SAP XI). Like other NetWeaver components, SAP PI is compatible with software products of other companies.   

    • SAP Cloud Integration technology offers the standard capabilities of an integration broker, mediating between entities with varying requirements in terms of connectivity, format, and protocols. It also reduces the TCO of a standard middleware integration by providing a common repository for interfaces with standard cloud capabilities, particularly multi-tenancy and configuration-based deployment.

Netweaver PI Option

Looking deeper into the Netwever PI integration option I was surprised to find that only roughly 40% of the SAP HCM customers have NW PI licenses. Given the amount of shelfware at many SAP customers I would guess that 30% or less actually have it deployed although that percentage would be higher for larger SAP customers. When I mentioned these numbers to SAP they would not confirm or deny which makes me assume they are in the ballpark. I decided to reach out to SAP Mentor and Netweaver PI Expert Daniel Graversen to get a sense of what it would take for a SAP HCM customer to install NW PI and he told me:

“With the latest releases of SAP PI (or Process Orchestration) a lot has been invested in getting the installation to be easier and faster. You would be looking at hardware requirement of three 12Gb servers at a minimum and it can run on both Windows and all Unix Variants. Installation of NW PI would take roughly a few weeks with Windows being easier deployment option from my experience. You would also require a database license if you cannot use MaxDB but many customers have some existing databases licenses which could be used. It will probably be around 40-50k€ for the PI installation with consulting and hardware and I’m not sure what additional SAP PI license requirements there would be”

I have no doubt it would surprise many customers to learn that they have to make an additional investment of 40-50k€ (or more), plus ongoing support and maintenance, to enable bi-directional integration between two companies under the same umbrella that has claimed for years that Integration is their DNA. A few weeks ago the story was even worse as SAP had ALSO planned to charge additional licenses for NW PI to SuccessFactors but they recently changed course and do NOT plan to charge SAP ERP customers who have a run-time license of NetWeaver any additional cost to use NetWeaver PI OnPremise to connect and get bi-directional integration with SuccessFactors.

SAP HANA Cloud Integration Option

Looking deeper into the SAP HANA Cloud Integration option that is planned to be released in Q1, 2013 for SuccessFactors integration is that SAP is still reviewing the subscription-licensing model. I have strongly recommended that SuccessFactors bundles the cost of the NetWeaver Cloud Integration within their existing SuccessFactors products much like they do with Boomi for Employee Central. This will allow them to be able to offer their customers a simple and cost effective option to get the more robust bi-directional integration packages that will be released starting in October 2012 and continue throughout 2013. It seems like a no brainer that customers who are licensing both SAP HCM and SuccessFactors products should not have to pay extra to take advantage of standard integration.

Impact and Options for SAP Customers

To summarize at a high level there are five options for customers to get SAP and SuccessFactors integration.

Option 1: Customers can utilize the simple CSV file based transfer of employee data from SAP to SuccessFactors using the integration add-on that SAP released in May.

Option 2: Customers can use their existing SAP NetWeaver PI infrastructure to integrate SAP with SuccessFactors. This will enable them to use all the future integration packs that are planned such as this one that was released on November 6, 2012.

Option 3: Customers can set up a new SAP NetWeaver PI OnPremise infrastructure to integrate SAP with SuccessFactors. This will enable them to use all the future integration packs that are planned.

Option 4: Customers can license and use SAP HANA Cloud Integration technology, when it is released in Q1, 2013. This will enable them to use all the future integration packs that are planned.


Option 5: Build custom integration between SAP and SuccessFactors. This is the model that 500 SAP customers used prior to the acquisition of SuccessFactors as their ONLY option was to take on the integration responsibility in-house and assume all the complexity, cost and long term support. That hasn’t stopped SAP or SuccessFactors sales teams from stretching the truth to claim “there are over 500 customers already live with SAP and SuccessFactors integration” but obviously it is not an option I would recommend moving forward.

The bottom line is it is important for SAP HCM customers who are interested in moving forward with SuccessFactors in a hybrid deployment option to spend a lot of time researching what technology option will work best for their organization and have a clear understanding of its overall cost. The HR Technology landscape is extremely competitive and SAP has a golden opportunity to leverage the large investment they made in SuccessFactors if they stay true to Lars Dalgard mantra of The Customer must win!” by offering them free and robust integration between SAP HCM and SuccessFactors. For more insights you can follow me on twitter or join the SAP and SuccessFactors group.

10/26 Update – Chris Kanaracus published an article called “SAP Details policies, pricing for linking cloud apps” that I would highly recommend you read as SAP has indicated they will finalize a decision in Q1, 2013.

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46 Comments

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  1. Luke Marson

    Hi Jarret,

    Great summary and a good time to clarify the options. I was expecting more of a rant, but it looks like you calmed down before putting pen to paper 🙂 .

    It would be great if customers without PI (on-premise or on-demand) could build integration without additional licensing, since integration should be a SAP standard rather than an additional extra.

    Can you clarify: is SAP NetWeaver Cloud Integration what is generally known as SAP NetWeaver PI OnDemand, or is this a different technology?

    Best regards,

    Luke

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    1. Jarret Pazahanick Post author

      Thanks for the comment and kind words Luke and I understand that SAP Netweaver Cloud Integration is the the same as SAP NetWeaver PI OnDemand but there is also a SAP Netweaver Cloud that is a different offering.  Good thing SAP likes to make this simple for SAP customers to understand 🙂

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    2. Ananda Rao KVS

      hi i am anand, moving sap hcm to sap successfactors , is it good decission and which one is best for me in successfactors. can you clarify me.

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  2. Jean-Bernard Rolland

    Hi Jarret,

    Thank you for one more great piece on HCM solutions by SAP.

    Technically, nothing prevents customers from leveraging any middleware they want or might already have in place, or to go with Boomi (the legacy integration from SuccessFactors).

    What customers get with predefined content are two things:

    1. the peace of mind that the integration is optimized

    2. the peace of mind that the integration will be maintained

    I can refer readers to a few resources:

    JB

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    1. Jarret Pazahanick Post author

      Hi JB

      Thanks for the kind words as much appreciated and sure you saw I referenced you and your blog above as well.

      As far as customers leveraging any middleware that would probably be option #5 which is hard to recommend for a number of reasons and as far as Boomi it is bundled ONLY with Employee Central and is an EXTRA cost for BixZ customers so that option has additional cost.

      The best option if you asked me for customers who do not have NetWeaver PI installed is to hope SAP/SuccessFactors sees the big picture and bundles the NetWeaver Cloud Integration with the BizX products and there is no additional cost for customers. Fingers crossed 🙂

      Jarret

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  3. Phil Gleadhill

    Hi Jarret,

    Thanks for the good, concise summary of the current state of play. My view is that there is quite a lot of confusion in the marketplace on this topic. Any good reliable information that helps clarify the situation is most welcome.

    Of course each corporation’s context and requirements and current deployment of SAP HCM and SF HCM solutions will vary, so there won’t be a single best integration answer for all.

    Cheers, Phil G.

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    1. Jarret Pazahanick Post author

      Thanks for the comment and kind words Phil as hopefully this blog helped provide some clarity as definitely agree there has started to be more confusion as it relates to integration.

      I think SAP owes it to customers to provide comprehensive bi-directional integration with SAP and SuccessFactors for no additional cost but if customers have customized either system than they own the responsibility for extending the integration and there in lies some of the value in using either NW PI or when it is released in Feb 2013 the NW Cloud Integration as it should be easier for them.

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  4. Steve Bogner

    Whatever the technology required to enable the integration, I just hope it works and doesn’t have too many bugs to work out 😉

    PI is a great product and has a lot of good use cases outside SAP HCM Core-SF,integration, so it’s a license that has residual payoff. And that’s a good thing.

    Still, only early adopters willing to invest a significant error in helping to stabilize the product need apply…

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    1. Jarret Pazahanick Post author

      Thanks for the comment Steve and I think we both have been in the SAP industry long enough to know the early adopters are probably going to face some “challenges”.

      While I agree that NW PI is a solid product it might be tough for customers that dont have it installed to secure the 50 to 100K needed to deploy NW PI if their initial use case is just to support a SAP/SuccessFactors integration especially since many are being “sold” seamless and simple integration from their sales reps. 

      One blessing is that many larger SAP shops have NW PI and it will help them not only for the standard integration (when more is delivered in Q4 and Q1/2 2013) as well as to help support custom requirements which many will have as well.

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  5. Raja Kishore Jogam

    Hi Jarret,

    There is the truth and then there is a ‘real truth’ 🙂 . Deserving heading on a subject that has had it share of confusing stance in the last few week.

    Nice work on the article and it gives a true picture on how the integration looks like. I was also thinking on similar lines that SAP should provide a process based integration, either via SAP Netweaver Cloud or boomi between on-premise and cloud solutions with no additional cost.

    I am suprised that a real process based integration between HCM solutions, on-premise and cloud, would cost extra. This after blowning the trumphet that integration is in DNA. And more so when pointing all customers to SF as go-to solution for talent management.

    This is like apple saying iPhone costs 199.99 but for Siri integration to give you real time wheather or calender updates it costs 10 bucks/month more.

    SAP is doing a few right things but still a lot of not-so right things.

    Right things – They are reaching out to customers ( my clients told me that SAP reached them to do a demo on new ESS timesheet feaures and they were suprised as SAP never used to respond for such requests earlier unless there was new revenue) ,engaging in sdn community etc

    Not-so right –  whats the point of engaging with clients and community when everything costs more. Some time back, I read an article which said that workday customer satisfaction was more than 90 %. By charging extra bucks for the integration, SAP is not doing the correct thing to catch up with workday on this index and infact heading south.

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    1. Jarret Pazahanick Post author

      Thanks for the detailed comment Raj and have to say I agree with everything as well as enjoy the iPhone example.

      On a side note Workday has had over a 95% favorable ratings since 2008 and it plays a key part in their company bonus which I dont believe is the case at SAP.

      http://www.sec.gov/Archives/edgar/data/1327811/000119312512375787/d385110ds1.htm

      I am hoping SAP does the right thing and does NOT charge for their NW Cloud Integration between SAP and SuccessFactors when it is released. From what I heard the licensing decisions on NW Cloud Integration have not been made so hopefully these comments will help SAP get a pulse of community as well.

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  6. Daniel Graversen

    Hi Jarret,

    I was talking with other PI consultants. The price above does not include the SAP PI license. This could have a fairly high price tag compared to the above mentioned price.

    daniel

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    1. Jarret Pazahanick Post author

      Thanks for contributing to the article Daniel as it was very much appreciated.

      The “good news” on the NW PI license costs as is that SAP  recently changed course and do NOT plan to charge SAP ERP customers who have a run-time license of NetWeaver any additional cost to use NetWeaver PI OnPremise to connect and get bi-directional integration with SuccessFactors.

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      1. Luke Marson

        Hi Jarret,

        For the benefit of all, can you clarify what SAP considers a “run-time license of NetWeaver“? It would be interesting to see how many SAP customers this would cover, since my understanding is that SAP ERP HCM runs on top of SAP NetWeaver platform and therefore that covers pretty much the entire SAP ERP HCM customer base.

        Best regards,

        Luke

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        1. Jarret Pazahanick Post author

          Great question Luke and I asked SAP the exact same question. I got the impression that EVERY SAP HCM customer would be covered and have no additional charges for a NetWeaver PI license to integrate SAP HCM with SuccessFactors.

          That said there is still a material cost for customers to get the NetWeaver PI environments set up and ongoing maintenance if they do not already have it in place.

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          1. Luke Marson

            Having no PI license would soften the blow, but I would like SAP to also offer an RDS with some integration framework in which customers can rapidly deploy and quickly configure to get integration up and running. I will suggest this when I meet with SAP about this topic next week.

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  7. Venki Krishnamoorthy

    Great article, answers many common questions. PI as an integration tool is accepts, as well the other options. What will be interesting is, how SF will be enhanced to talk seamlessly with the on-premise. That will be a true value add, since customers do not have to pay additional costs. I guess, it will get included in the roadmap.

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    1. Jarret Pazahanick Post author

      Thanks for the comment and kind words Venki.  Great point and one of the real advantages of using one of the SAP/SuccessFactors ‘official” integration options mentioned above is that as SAP HCM core or SuccessFactors changes the responsibility for integration will be on SAP and not the customer.

      That said I wonder how much the SAP HCM core will “really” change that impact the hybrid model as my guess as much of the new BizX functionality will use and integrate with Employee Central first and SAP HCM be later but just a guess.

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  8. Andre Polakoff

    Thanks for sharing, Jarret. Great info.

    We need to keep in mind that regardless of actual integration technology (PI, Cloud Integration or CSV over FTP) SAP customers would have to spend significant effort on proper data mapping between SAP Infotypes, tables and BizX fields.

    With each customer configuration being different, custom infotypes and specific requirements I do not see how field mapping part of integration can be delivered out-of-the-box. Just like with the current Add-on (Option 1), there are some default choices for mapping, but in reality about 50-80% of the fields require custom BAdI implementation to meet the requirements. The Add-on has only about 50 fields for basic employee/user data. The data mapping for full blown integration with Compensation, Recruiting and other modules of BizX could be a fairly sizable effort.

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    1. Jarret Pazahanick Post author

      Thanks for the comment Andre and you bring up a good point especially for customers that have heavily customized either in their SAP HCM or SuccessFactors environments the integration effort is going to be quite a bit over and above what SAP delivers. Also important to keep in mind that as of today ONLY the 1 way CSV file option is available from SAP as well.

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  9. Paul Snyman

    Nice summary and perspective Jarret. With regards to Options 2-4 and possibly 5, I understand that the integration component of the SuccessFactors cloud is enabled via a SOAP-based API known as SFAPI (SuccessFactors Data API), example here. While this may not be too relevant for pre-configured integration it certainly is for exploring other integration options and gives a glimpse of the direction of SAP’s Cloud strategy and the role that a PaaS has like this SuccessFactors example. Any thoughts on this welcome.

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    1. Jarret Pazahanick Post author

      Thanks for the comment Paul and I understand that SAP has some announcements planned around Cloud Integration and their strategy at SAP TechEd in Vegas next week as well as Sapphire Madrid so hopefully it will become more clear.

      I did have an opportunity to attend a briefing earlier last month on this very topic but as you can tell from my SAP Briefing – Cloud, Mobility and HCM recap the cloud portion did not go very well.

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  10. Howard Marshall

    jarett

    can you provide sources for your information? after reading your article i asked our sap hr rep and she indicated that a decision has NOT ben made with regards to netweaver pi on-premise. i think you should not provide inaccuracies here since many customers rely on you for information. thanks

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    1. Jarret Pazahanick Post author

      Hi Howard

      Thanks for chiming in as you have been quiet lately and surprised you just assumed it was me that is inaccurate and not your sales rep 🙂   I am fortune to have discussed this with senior execs within SAP but obvious that this has not funneled down to the Sales Organization yet as the decision was just made early last week.  The information stated above is 100% correct

      Just to be clear there will be NO extra license charge for SAP ERP customers who have a run-time license of NetWeaver (which you would) to use NetWeaver PI OnPremise to connect and get bi-directional integration with SuccessFactors.

      That said if you do not have NW PI OnPrem already install there will be substantial costs to get the landscape/environment up and running as well as ongoing maintenance.

      Thanks as always.

      Jarret

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  11. Pete Moxon

    As a technical guy it is great to see modern development paths opening up for SAP platforms but when I site back and ponder what a business needs to do to see a positive ROI for all this stuff, I have more question marks above my head than light bulbs. For HCM in particular.

    Regards,

    Pete

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  12. Vasiliy Baranovskiy

    Hi Jarret!

    I found that  SAP HCM <-> Employee Central integration scenario is most often mentioned as standard delivering. Does this mean that Employee Central subscription mandatory for usage of standard integration package? Do you know? The fact is that most popular Perform & Reward Bundle doesn’t include EC and SAP HCM customers don’t need it actually.

    Thanks.

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    1. Jarret Pazahanick Post author

      I dont know of ANY SAP HCM to Employee Central integration that is available although their is a Employee Central to SAP Cloud Payroll and in development to go back to SAP FI and all this uses Boomi (which is built in EE Central subscription) but the plan is to eventually over Netweaver Cloud Integration (licensing model still being worked out internally).  I know you are following this closely as well so let me know if you hear/see anything differently.

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  13. Thorsten Franz

    Excellent blog, Jarret. You really are a troublemaker in the best sense of the word – or, as Darren Hague once beautifully said, “a pain in the arse in the most constructive way possible.”

    Best,

    Thorsten

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    1. Jarret Pazahanick Post author

      Thanks Thorsten as that means a lot coming from you and all the great content you publish on SCN.

      This is a topic I feel passionate about and SAP has a real opportunity if they can get integration “right” especially when it comes to the new SAP HANA Cloud Integration.

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  14. Kheren Peceros

    As always, this blog was very useful 🙂 , but I have one technical question: Does SFSF work with SAP PI 7.3? or, does SFSF work with a particular version of SAP PI?… I have this question because one of our clients has told me that the SFSF team told them that the only version that SFSF support is SAP PI 7.1… I found that a little bit weird, so I’m just asking..

    Thank you so much,

    Kheren

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  15. Dave Dahlgren

    Hello Jarret,

    Great summary.  Looking at the date (Oct 2012), have there been any significant changes or updates to these five integration options, or to SAP’s pricing or licensing strategy for SAP <-> SFSF interface tools?

    Dave

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    1. Jarret Pazahanick Post author

      Hi Dave

      Yes and unfortunately SAP decided to move forward and charge for the HCI platform (7.5% of net SuccessFactors Subscription) so even though the SAP HCM/SuccessFactors iFlows are free to be able to use this integration you will need either NW PI (only ~30% of HCM customers have) or pay to set it up or pay to get the HCI platform which will cost additional $.  At the core integration between SAP HCM and SuccessFactors will not be “free” for many customers given the above. 

      My hope was the SuccessFactors would bundle it like they do with Employee Central and Boomi and it is just another reason why I feel that longer term a full cloud “unified” solution will be in the best interest for most customers.

      Hope all as well.

      Jarret

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      1. Luke Marson

        I spoke with SAP/SuccessFactors before Christmas and they may be considering bundling HCI with Employee Central in 2014. Disclaimer: this is not confirmed and may not happen 🙂

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      2. John Studdert

        Speaking of updates Jarret: any chance of a new blog post on this topic giving an update on how the picture looks now in 2014?


        While I’m at it, thanks for this and the related “Proven Integration is Hype” blog posts, they’re excellent reading and particularly appreciated given how controversial the latter proved to be. It can be easier to just pass this hard-won knowledge onto your own clients when you pick up flak for sharing it with the wider community, so thanks again for sharing (I strongly agree with your opinion and experiences in the latter blog post for what it’s worth).

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        1. Jarret Pazahanick Post author

          Thanks John for the comment and unfortunately there was a LOT of flak around this article from SuccessFactors as they were not happy with either of these articles.  That said everything in both was 100% accurate and integration between SAP HCM/SF/SAP HCM in general is not as far along as I would have hoped after 2.5 years although the more knowledgeable I get the less I see the overall value in the hybrid approach for customers anyways.

          What is not often discussed, is the fact that there are some integration issues within SuccessFactors itself due to all the acquisitions (Jobs2Web, Plateau, InfoHRM) which several large customers I have spoken with in the past month want to see addressed.

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          1. John Studdert

            Yes that’s certainly the impression I got reading the replies in the comments from SAP employees – comments which I felt missed your point, to be honest. I’d have liked to see them reacting by being very worried that customers were hearing a misleading message (whether through their fault or not) and trying to engage with you on how they could correct this, rather than focus on defending the “intent” behind the slides. Their reaction to your blog sets the wrong tone in my opinion.

            In fact the main thrust of the argument that some commenters made (though perhaps not SAP employees directly, to be fair) boils down to “caveat emptor” which is surely not good enough in the enterprise market if you want to build a long and healthy relationship with customers.

            Anyway, thanks again for the blogs and thanks for the update. It’s great having senior people in the industry willing to come out with such honest opinions, and the real shame is that I’m convinced this type of feedback is actually the best way to ensure a strong product in the long term. I share your concerns around the maturity of the integration solutions, but for me they’re quite pressing concerns as we may shortly embark on such a project with a client!

            I realise it’s a question that only prompts lots more questions, but as a general stance would you then push customers towards a “big bang” approach of moving HCM to the cloud rather than look at a more gradual interim hybrid model?

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  16. Jarret Pazahanick Post author

    Thanks for the detailed comment John and I think many customers would be wise to align their strategy with where SAP is spending their investment dollars and in the case of the HCM that is clearly with SuccessFactors.

    Most customers would be wise to review the total cost of a hybrid approach which includes licensing, support, interface and reporting challenges and compare that to a full HCM cloud based solution both from SuccessFactors and other vendors such as Workday, Ultimate and determine which matches up to their business requirements.

    On a side do you realize a SAP customer that wants to keep their core in SAP HCM and Talent in SuccessFactors could be looking at 8-10 different licenses (BizX, WFA, Fiori, HCM, ESS/MSS, Payroll, BI/BO, HANA, EFM) assuming they want all the functionality. 

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    1. John Studdert

      “On a side do you realize a SAP customer that wants to keep their core in SAP HCM and Talent in SuccessFactors could be looking at 8-10 different licenses (BizX, WFA, Fiori, HCM, ESS/MSS, Payroll, BI/BO, HANA, EFM) assuming they want all the functionality.”


      No I had not as I’m not involved in the licensing consideration on this particular project but that’s well worth knowing – that could add up to a pretty scary figure! Thanks for pointing this out.

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  17. Jason Wu

    Hi Jarret,

    This is a good article and it clarifies many of my questions about HCM and SuccessFactors. Thank you very much!

    Best regards,

    Jason

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