SAP’s approach to HCM solutions
As week-end workout, I tried to summarize my views on SAP’s approach to the HCM market in 25, 50 and 100 words.
In 25 words
SAP is enabling the HCM transition to the cloud but will keep investing heavily in core HR on-premise so customers can leverage their existing systems.
In 50 words
The HCM market is directionally moving to the cloud. Many customers will go directly to SAP’s full-cloud solution, which is globalized, integrated to the ERP and functionally ahead of competition. Others will prefer SAP’s hybrid solution combining existing core HR foundations, where SAP is investing heavily, with cloud Talent Management.
In 100 words
The HCM market is directionally moving to the cloud. Many customers already have a deliberate cloud strategy. For them, SAP offers a unique full-cloud solution which is globalized, functionally advanced and integrated to the ERP. It combines the best Talent Management and Analytics suite with state-of-the art cloud core HR. On the other hand, some customers will prefer to build on top of their existing core HR foundations to deliver strategic Talent Management and Analytics. For them, SAP will keep investing heavily in core HR on-premise and deliver a hybrid integration between core HR on-premise and cloud Talent Management.
I hope it helps clarify a lot of questions I received recently from various stakeholders.
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Thanks for the blog JB and I liked the format though think you paint a rosy picture on where SAP/SuccessFactors currently sits. Here are a few of the areas where I would disagree and think SAP has quite a ways to go.
SAP’s full-cloud solution is integrated to the ERP - I assume you are either referring to the new Cloud Payroll (which has no customers) and the integration back to ERP FI or the SuccessFactors Compensation back to Payroll which is coming this month. Either way saying “integrated to ERP” is a stretch (at this point) if you asked me. On a side here are my thoughts on a closely related topic The Real Truth about SAP and SuccessFactors Integration
SAP’s full-cloud solution is functionality ahead of the competition - Curious where you are getting this information from as “full cloud” means Employee Central as the core and Gartner and others have recently called in “Lightweight HRMS” which I tend to agree with. While I know SAP is spending a lot of resources and has big plans for Employee Central saying that right now it is a ahead of the competition is a stretch unless you have some information that I don’t.
SAP offers a unique full-cloud solution which is globalized, functionally complete – It is hard for me to consider the HCM Cloud solution “functionality complete” without a time management or benefit solution (both using 3rd Party) as well as a just launched Cloud Payroll solution on a 20 year old platform.
I would much rather see SAP follow the approach that I see out of Workday in interviews like this where they admit their FI product is a work in progress and will be functionality comparable to legacy offerings in a year as everyone knows that SAP has a ways to go on integration between SAP HCM and SuccessFactors and SuccessFactors Employee is at least a year out before being a more complete HRMS offering.
Hello JB and Jaret,
First thanks for being leaders and getting the information out and discussions started. I think the last year or so have presented a more open view of SAP HCM and where and how it is proceeding.
My experience with SAP presentation of their products has always been that they fail to insure customers are aware of all the required elements and the total costs in terms of licensing and in terms of components. As an example MSS is presented in a great light in demos etc. It can be an awesome tool leveraged to increase the value of an SAP implementation. What is not presented is a clear technical path of what components and needed and what underlying structures have to be in place. this frustrates the clients I have worked with in the past. Paraphrasing a manufacturing client here is a a summation of the feeling that SAP sometimes generates, "We love core SAP and want to be an all SAP shop, but SAP won't let us. Can you help us figure out how to plan our performance management and compensation management so that we use SAP if possible and if not so that it is integrated with our SAP HR/PY system?"
The acquisition of Success Factors and the cloud plans look a little like the days or ESS in the old workplace and the confusing shift to the portal after the acquisition of Top Tier. While it seems rare sometimes, clarity really does differentiate and provide a good basis for sales. Hope to see more clarity as a result of the work JB and Jarret are doing.
Great point Greg and I was on a SAP HCM Customer webinar a few weeks back showing some slick end to end functionality but looking at the technologies involved it would have involved 7 different licenses as well as infrastructure costs which of course was never mentioned. Lets just say I was not surprised to read in a recent survey that 95% of customers want more clarity around licensing
Greg, thank you for the response.
It is true that we in Solution Management are working on improving clarity and transparency (or at least trying to).
Meanwhile, please feel free to reach out directly in case you have any doubts that need to be lifted.
As always, thank you for the blunt feedback. As always too, you are spot on.
A couple of comments. On the topic of "SAP’s full-cloud solution is integrated to the ERP", I am indeed referring to 3 integration points:
1. The integration between Employee Central and Payroll
2. The integration between Employee Central and core FI, and later on logistics, production etc.
3. The integration with Employee Central and other modules on the cloud.
In that context, I think it is fair to say that Employee Central is ALREADY integrated with the ERP and payroll, since we are delivering on cloud payroll with the notion of a minimaster, and since the integration to FI is in the hands of our development right now. It is a partial integration, as it will take time to consider all 171 points points. However, I think it is fair to claim that Employee Central comes with integration to the core SAP solutions, even if it is not (at least not yet) an integration as complete as it exists in the legacy business suite,
I am preparing a full blog entry on the topic of Employee Central integration to core ERP. Stay tuned.
Regarding your second comment"SAP’s full-cloud solution is functionality ahead of the competition", the full-cloud solution is a combination of Employee Central and the Cloud Talent Management. Both Forrester and Gartner rank the Talent Management Suite and/or its individual components as the leaders on Talent. So a combination of Talent Management plus the accelerated Employee Central creates what I claim is an overall solution ahead of the competition.
Regarding your latest feedback point, I would be replacing "functionally complete" with "functionally advanced".
Thank you again for the feedback.
I came across this thread by coincidence as I'm not an HCM or SuccessFactors insider, but I really can't let this one go by. Maybe from an SAP POV the integration exists as soon as "it is in the hands of its developers", but I'm afraid customers/partners will disagree strongly. For them, it only exists if they can buy and use it. Which, being a partner, seems fair to me 🙂 .
Regarding your penultimate remark ("ahead of..."), if you compare your Talent Mgmt Suite + EC to others Talent Mgmt suite, I'm sure you're right. If you however compare SAPs full-cloud solution to others full-cloud solution, I'm not so sure, but that might also depend on whether you consider the functionality existant when in the hands of the developers...
Just my outsider 2c, Fred
I think the SAP HCM internal team deserves credit for not only the quality of blogs over the past 3 months but willing to publicly continue the discussion in the comment threads and it is hard to disagree with your "thank you for the blunt feedback.As always too, you are spot on" comment 🙂
I had the same observation as Fred that "in the hands of developers" especially with some of the long cycles at SAP is often far from customer ready. Just think if 1 year ago you had said.....SAP HCM UX is very competitive because the developers had started coding the HR Renewal.
Your point about "ahead of" is fair given your logic although Workday could claim they are ahead for the same reasons due to the fact that most industry analysts consider their HRMS Core to be the best in the marketplace and they are continuing to build out in other areas.
Have a great weekend.