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I recently had the opportunity to spend a week in Las Vegas attending the HR Technology Conference and SuccessFactors SuccessConnect and during that time had lots of in-depth discussions with analysts, customers and fellow consultants.  One of the SAP/SuccessFactors products I got asked the most about was Employee Central, which is the SuccessFactors Core HRMS offering. 

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Here are some of the most frequent questions and the opinion I shared.

Is Employee Central Enterprise Ready? – Since there are no standards around what “Enterprise Ready” really means I will tell you that many large companies have purchased Employee Central such as Pepsi, who was front and center all week at both conferences, and will have all 300,000 of their employees on Employee Central by 2016.  Early adopters will help pave the road for every vendors SaaS offerings and it is important to note there is no vendor in the market that has every feature/function that the legacy OnPremise vendors have built over the past 25 years.  At the core Employee Central has come a long ways in the past 18 months, has an aggressive roadmap and is one that should be considered if you are looking to move your core HRMS into the cloud.

How does it compare to SAP HCM? – It was made very clear that SuccessFactors does not plan to duplicate every feature function that has been built into SAP HCM over the past 20-25 years which in my opinion is the right strategy. I can respect for some customers this will be perceived in a negative light but they must remember that part of deploying a next generation cloud solution should include revisiting existing business processes and how your company does HR. Jason Averbook had a wonderful keynote at the HR Technology Conference and his core message was how we should not be trying to recreate the past, in a shiny new solution, and it was time for every company to start “Reimaging HR”. On a side note many things that can be real pain points for SAP HCM customers such as Mobile, Ad Hoc Reporting, Workflows, Overall Usability are embedded in the Employee Central offering.

How does Employee Central compare to Workday?  – This was a hard one for me to answer since I only have first hand experience with Employee Central but it is obvious that these are two vendors that are being shortlisted by many customers.  My high level recommendation was for customers get in-depth demos from both, do a lot of research, request to talk to several of their existing customers, and see which one matches up best to their business requirements. On a side note well known analyst Josh Bersin talks about the two vendors in his well written event recap.

How does Employee Central compare to Oracle Fusion?  – This was only asked by one customer, and one I obviously couldn’t answer, but it is was pretty obvious that most SAP HCM customers fall into one of three groups.  Those that plan to stay with their SAP HCM OnPremise solution and attempt to innovate around the edges using a hybrid strategy, those that are kicking the tires moving fully into the cloud and are loyal to SAP, and those who are looking at multiple HRMS vendors with the most common two mentioned to me being Employee Central and Workday.

Is SAP Really Committed to Employee Central? – It is pretty obvious that there is a huge commitment within SAP around Employee Central, which came across loud and clear when Vice President Thomas Otter said “ We have more engineers working on Employee Central than we ever had at ANY point for SAP HCM”.  It is my belief that within the HR Technology space we are in the early innings of a major shift from client server technology (think SAP HCM, Peoplesoft, Oracle EBS) to next generation cloud based offerings within HR. Core HRMS is the foundation for many companies and why it is so important for SAP that Employee Central does well because if they lose the core to one of their competitors they will most likely lose the ability to cross sell their other offerings such as SuccessFactors BizX, Workforce Analytics, Jam, Payroll and potentially longer term Finance.

How Flexible is Employee Central? – It is surprisingly flexible as one of the myths around many of the SaaS based offerings is you have to take exactly what the vendor gives you and that is not acurate.  This is one area of heavy investment within Employee Central and two powerful offerings include the Meta Data Framework and the HANA Cloud Platform Extension Package. Lots of buzzwords were thrown around this week such as scalable and extensible but SuccessFactors is starting to build out a tool set to be able to deliver those words.  On a side note, several things in Employee Central can be configured that would have required ABAP development in the SAP HCM world.

When will Employee Central Offer more robust time functionality?  – This was a topic of conversation in every session I attended as well as have heard this repeatedly over the past year from customers.  Some hints were dropped that SuccessFactors may be looking at offering a time sheet in the not to distant future and it already has Time Off functionality but it appears that a powerfully time processing functionality is a ways out.  In the interim, customers are recommend to use partners such as Workforce Software and Kronos which are integrated with Employee Central.

How is Employee Central doing in the Market? – From the information shared at SuccessConnect there are currently 3.4 million users of Employee Central, which is some sizable grow from where it was 18 months ago. I know first hand there are several large Employee Central implementations on going and several large SAP HCM customers considering it.

Is Employee Central really a true cloud offering? – Employee Central is a true multi-tenant SaaS solution that would even qualify for my friend Naomi Bloom’s rigid InFullBloom SaaS. In my opinion, it has very modern cloud architecture and the least technical debt of any of the SAP/SuccessFactors HCM product offerings. I understand that for many customers the technical underpinning can be complex but they play a big role in the vendor being able to quickly deliver future innovation, which is an important consideration when comparing SaaS vendors.

Does Employee Central have a Payroll Offering?  – Yes, as customers have a few different options if they are considering in-house payroll as Employee Central integrates with Employee Central Payroll (Hosted) for 23 countries or SAP OnPremise Payroll that has roughly 7,000 customers worldwid. There is some “exciting” new functionality coming in 2014/15 for both Payroll solutions that is long overdue including a new Payroll Cockpit and a few other things that cannot be made public yet.

As a customer, how do I handle all the new functionality? – Make no mistake the four releases a year can be a blessing and a curse. The good thing is that changes are coming every three months and the bad thing is that changes are coming every three months. It is important that Employee Central customers give a lot of thought on how they plan handle this rapid innovation within their core HRMS system. Some of the ways I would recommend for customers to stay on top from an information standpoint is to always attend the quarterly release calls which are updated in the SuccessFactors customer community, attend webinars, review the new Upgrade Center, get the SAP and SuccessFactors book, and of course be part of the popular SAP and SuccessFactors Group.

How do I find a good Employee Central Consulting Firm – There are some interesting dynamics in the marketplace where several of legacy SAP HCM consulting firms are trying to break into the SuccessFactors market by low bidding projects so they can win their first Employee Central project and train their people on the job. It’s one of the reasons SAP Mentor Luke Marson wrote SuccessFactors Consulting – The Wild West and check out Howard Marshall historical perspectives in a short article  as well (check out the comment thread).  I think it is important to find a SuccessFactors consulting firm that offers a true SaaS consulting model to install Employee Central as if not you could end up paying a lot more for your implementation. Please, please, please ensure you spend some time to do detailed reference checks with customers where the consulting firm you are considering has actually delivered an Employee Central implementation as there is a LOT of shady behavior happening in the market.  Once you find a good consulting firm, it is never a bad idea to follow my Seven Tips to Ensure You Hire the Right Consultant as most apply to SuccessFactors as well.

How do I get trained in Employee Central?  –  SuccessFactors offers a three-week Employee Central Mastery training that is ONLY available to SuccessFactors Partners for those interested from a consulting angle as well as there are 12 other mostly online courses out on the SuccessFactors Learning Portal.


Customers must understand that their core HRMS system will set the foundation not only for transactional HR, but also for their strategic HR as well as analytics. While I am sensitive to the fact that some companies have spent millions of dollars on their existing OnPremise HR technology that should not necessarily prohibit them from moving to a next generation solution when there is an opportunity. It’s sort of like an old car that is paid off, you know how it works, you have customized it, you know how it drives and are comfortable just paying the yearly maintenance to keep it running, but understand, that an old car gets to drive down an old road. It is very clear that the HR industry is rapidly changing (aka traveling down a new road) with things like mobile, gamification, social, predictive analytics, big data, millennials entering workforce and these are things that many of OnPremise systems that were built 20-25 years are not very well prepared to handle. It is my belief that most of the real innovation in HR Technology is happening in the cloud, and as you can see from the above, SAP is making a big bet with their SuccessFactors Employee Central offering and even moving from SAP HCM to Employee Central internally.

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  1. Sven Ringling

    Thanks a lot for this comprehensive report! Very useful.

    One thing makes me a bit suspucious that they may be damaging something potentially good by overselling it too early:

    It is usually not a good sign, if one customer is presented again and again and again as the big success story as Pepsi is for EC. Even more so, as what the present is a plan for a future success story (in plain English: a hope story) – which they excuse by the huge number. Why are they not presenting a few 1000-5000 EE companies with a strong core HR on EC?

    Don’t get me wrong – I’m sure it’ll be a great product soon, but I find this marketing approach cheeky even for US/UK standards.

    However, to their credit:

    The more promising part is the timeline you say Pepsi have. This seems to consider change management and is not as aggressive as the “3 or 4 times faster than on-premise” promises often made so far. So, on this end it seems to become more realistic.

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    1. Jarret Pazahanick Post author

      Thanks Sven and although Pepsi, if all goes well “could” be a successful story, seeing the roadmap last week it has a longs ways to go before fully moving its HR core to the cloud. I think it is impressive to see their VP of Global HR Shakti Jauhar be willing to be an somewhat early adopter (for the the real large enterprise) of Employee Central as well as put a realistic implementation plan in place.  Given Pepsi’s brand I don’t think it will be the last time we see them on stage 🙂

      I have been very critical of SAP’s messaging in the past (as you know) but came away impressed as in every session I attend with Thomas Otter or his Employee Central team as it was lot more authentic, open and toned down from the past which I think will play a lot better with customers.

      It will be interesting to see where things sit a few years from now but when you see SAP internally starting to replace SAP HCM with SuccessFactors Employee Central that says a lot.

      Fully agree on your 3-4 times faster comment though some SI’s are saying it will take the same effort as an OnPremise implementation which is not correct either.

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      1. Sven Ringling

        Indeed – if you believe them, it must look credible indeed.

        Fully agree with the final comment. It’s wishful thinking from some SI’s that they can sell as many days as they could on-premise (where it was already far too much imo).

        And they shouldn’t offer the same mix with too much tech focus either (though that might be a way of really needing that much time: send in the wrong people – but that’s just me being cynical)

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        1. Howard Marshall

          can you or someone explain the following. from a functional consulting perspective (not technical – basis, abap etc.) why is it really less in terms of time? don’t you still have to do all the same things like gathering business requirements, testing, configuration etc. so where is it, from a functional perspective less?

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          1. Jarret Pazahanick Post author

            Hey Howard

            On a typical SAP HCM you might require a basis, workflow, security, ABAP and functional consultants while in a typical full cloud implementation you only require functional consultants which is one of the core reasons why the consulting costs should be reduced IMHO.

            Since you asked specifically about functional consulting I would not expect this to be a huge difference although with the model that is currently in place there is a lot more responsibility of the customers to do things that I have seen consultants do in the SAP HCM world such and toolsets to help them.  Some great examples are data and employee uploads.  That combined with “potentially” less testing due to no customizations and training due to a more user friendly UI/UX could result in less functional consulting needs as well.  Important to note though that the functional consultant in the SuccessFactors Employee Central will be working with Role Based Permissions (security) and Workflow which are two areas that never fell under my responsibility in my 15+ year SAP HCM career.

            I think as it is still in the early days of EC it is also in the early days of finding the right consulting resourcing level that makes sense for customers.

            This is a topic near and dear to Chris McNarney so he might want to chime in as well.

            Jarret

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            1. Chris McNarney

              So since Jarret called me out by name, I can’t just sit and lurk in the shadows I guess, can I? I could talk forever about this subject, so I’ll try to keep it relatively brief.

              Below Steven makes a critical point that the big difference on the shorter side for the functional consultant is the lack of customization.  Anyone who has ever done an SAP project knows a variety of things around customization can add time to the overall outcome.  Indeed too as I’ve noted before, one of the nicest things about going to implement SFSF is that you’re not terribly far off from a potentially implemented solution on the first day.

              However, and before people flock in from all around to tell me how wrong I am, this is purely my opinion based on my own implementation experiences, I see the part time consulting & reduced implementation time frame put a ton of weight on the client’s shoulders.  An implementation of any non Employee Central (I’ve only taken the mastery training in EC, never implemented, so I don’t feel qualified to comment on it) module has baggage that comes with it which is going to need to be addressed.  Modifications to the UDF (the data file moving between HRIS and SFSF), SSO, roles & access, ad hoc reporting,  Employee Profile, jobs/job families, training/show me, etc.  That’s off the top of my head.

              Not all of these things will find their way onto a consultant’s Statement of Work.  If they did, it would inflate the time required.  My own experience sees a lot of these things omitted, or addressed at very high level or just plain assumed to be handled by the customer at the detail level.  There’s a big difference between “turning on ad hoc reporting” and actually teaching it to your customer in a way that will be helpful to them.  There’s a big difference in telling a customer to send whatever data fields they want on the custom fields versus actually working with them and their legacy system to figure out what data will be useful in SFSF for reporting and permissions.  If you want to do something like convert data from an old system, or interface some demographic data like employee education, there’s a big difference from just handing the customer the template file and actually helping them through the process.  Don’t forget you’re going to get at least 1 quarterly release of functionality during your project.  That functionality may change some things you’ve done so far.  There’s a big difference between just pushing ahead and going back to see what those changes mean to the work you’ve already done.

              All of this assumes the customer even can keep up.  Look at Steven’s example below. Kickoff, design, 3 configuration iterations, testing & go live in 3 months.  It takes a lot to go right to make that happen.  The customer basically needs to have no fundamental business process flaws or data integrity issues, understand all of the functionality, be able to make decisions incredibly quickly, get buy in from stakeholders, train end users and have internal staff ready to take over in 3 months.

              Is the implementation cycle shorter in SFSF than it was for the same module in SAP?  Yes.  It’s absolutely because of the lack of customization and the lack of red tape (no one from security shows up with a spreadsheet asking you to name every transaction may possibly ever need access to so they can run it through the GRC!).

              However my own opinion is that it’s not 3 months either.  My eyes see more time than that required to be successful.  The problem I see right now is that you’ll never get someone coming in to say they’ll implement in twice the time – or if you do, you’ll move on when someone else comes in at half of your estimate.  But by doing that, my gut tells me that client is biting off a whole lot more than they realize because the person with the $ likes the price tag.

              Again – just to clarify – this is purely my opinion based on my own implementation experiences and those of some of my colleagues.

              *edited for grammar – apologies to my mother and school teachers.

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              1. Jarret Pazahanick Post author

                Great comment Chris and I think it is important for customers to realize that there is a lot more responsibility expected from them and their team and that is one of the factors that reduces the overall consulting costs. When it comes to core HR (ie Employee Central) it is the foundation for the system so customers how fast of an implementation they REALLY want but that said under no circumstances should a full cloud HR deployment cost the same as a full HCM ERP implementation assuming like scope.

                Nice to see you (albeit to brief) at SuccessConnect last week.

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          2. Steven Secora

            Howard,

            Another key point is the implementation methodology that is used by many of these companies in deploying a SaaS solution.  Since customization is not allowed, it shrinks the Build phase of the project down quite significantly.  Usually what you will see is an optimized, iterative methodology that moves much quicker than traditional methods.  Usually there are three iterations of configure/test before it goes to User Acceptance Testing.

            The two items that do still take time is the Design phase (you need to make sure you’ve designed your processes properly) and the Conversion stage.  Depending on how harmonized your data is, this may take longer.  However, a lot of companies that are making the jump now have already gone through that process when implementing SAP HCM.  If all your data is there and in the same format, Conversion won’t take that long.

            All in all, it does get done faster.  We just went through the implementation of the SuccessFactors Compensation Module in about 3 months, Greenlight to Go-Live.

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  2. Krishnakumar Ramamoorthy

    Great summary Jarret; I shouldn’t expect any less from you anyway:-) Agree with you on rethinking the existing HR business process; going SaaS is a great platform to do some process cleanup! The risks of frequent upgrades is overrated. Incremental upgrades pose less risk than an yearly upgrade, in my opinion. However, I am curious how much time SAP will give customers to regression test (if at all) before rolling the new functionality every quarter.

    Thanks for your time to summarize this. The screenshot of Employee central looks pretty cool..

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    1. Jarret Pazahanick Post author

      Thanks Krishnakumar and I ran into quite a few of your Deloitte HCM colleagues last week at the two conferences.

      I think the re-thinking of the business processes is something that should also be at the forefront of an OnPremise implementation regardless of module but all to often gets left behind when you can “customize” the system to handle even poorly designed processes.

      Many of the changes each quarter are opt-in per the customer and there is a lot of discussion on what is the right frequency of updates as SuccessFactors does 4 updates a year and Workday recently moved to 2.  Just like in the onPremise update…..when the technology changes there is impact to the business.

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  3. Luke Marson

    Hi Jarret,

    Great blog and reflects a lot of things I heard from and told to customers at SuccessConnect. The interest at SuccessConnect was quite strong and it was interesting to hear a consistent message from Thomas Otter about the progress and reasons to move to Employee Central. There are many customers where Employee Central is not a viable option right now (as is any other SaaS core HCM system), but in the next few years I see this changing. The market is slowly becoming and the product quickly becoming ready for prime time.

    Best regards,

    Luke

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  4. Lisa Atkins

    Jarret,

    Wonderful information on Employee Central and the sea change happening to the HRMS landscape. I’ve worked in HR for over 20 years and HR Systems for 14 of those, so I’ve seen a ton of change. HR tends to usually lag in terms of corporate systems, which has limited their ability to contribute to the business in terms of data driven analysis. Workforce Analytics and Planning will open up huge gains for companies that make the investment in a HR system that fully integrates with these types of applications and EC has a big advantage in that SuccessFactors has made big investments in integrating it with these two packages within the overall suite.

    Regards,

    Lisa

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  5. Steven Secora

    Jarret,

    This is a fantastic overview and confirms a lot of what I saw at both conferences.  I think the important thing that you left out is that Thomas Otter confirmed that Employee Central does not have and will not be developing US benefits functionality.  I agree with their direction on this.  It his high time US-centric companies realize that US benefits administration is a complex exception to how benefits are administered around the world.  To mitigate the fallout, they’ve partnered with Aon Hewitt and BenefitFocus for the outsourcing of benefits.

    Although I feel that it is a fantastic idea to outsource US benefits administration, it adds an additional step to migration from SAP HCM to Employee Central for those who are administering benefits in-house.  I either need to first outsource benefits, or I need build integration back into my ECC solution as part of my Employee Central implementation if I want to minimize business disruption.

    Thanks,

    Steve

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    1. Jarret Pazahanick Post author

      Thanks for the kind words Steve and you bring up a great point about US Benefits and it make sense strategically. As you mentioned it another item that some SAP HCM customers will have to consider when they are looking at Employee Central.

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  6. Jonathon Luplow

    Great article. I implemented EC with Sprouts Farmers Market – we have been live about one month now and so far we are just diving in looking at which features we can use and what will work with our business. We used BlueAscent as our partner to help with some of the implementations – and they really know what they are doing.

    They put the customer first and really take the time to understand what our business wanted to do before building out the system. I am sure there are a lot of great partners out there — but Sprouts couldnt be more happy with BlueAscent.

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    1. Jarret Pazahanick Post author

      Thanks for the kind words Jonathon and always great to hear directly from customers. It will be interesting to continue to hear about your journey with EC especially given how quickly the innovation is happening in the product.

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  7. Christopher Solomon

    Thanks for your blog and perspective as always, Jarret!

    I think we are much closer now to seeing all the “feature and function” lists from the real players in this space starting to duplicate, overlap, copy, etc. with far fewer gaps between products as we had say a year back. This is where the TRUE differentiators amongst the players are starting to shake out much more obviously. 

    Exciting times! 😉

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    1. Jarret Pazahanick Post author

      Thanks for chiming in and exciting times for sure. For us “old dogs” it seems like we have waited a lifetime for HR to be hot and front and center.

      Enjoy TechEd next week.

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  8. Harris Moideen

    Jarret,

    Great insight and very detailed analysis.I have a question for you, where does this leave the clients of SAP based BPO’s.There were lots of large organisations that streamlined thier process to go from heavily customised ones to standard SAP both in HR & Payroll.After all that effort will they again take another mammoth effort to move to EC ?

    Also is there a future for SAP HCM based BPO’s .

    regards

    Harris.

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    1. Jarret Pazahanick Post author

      Thanks for the kind words Harris and in my opinion BPO’s are a logical group to move to the cloud and already seeing real life examples with Dupont, Kimberly Clark, J&J etc as all to often these outsourcing arrangements are done to reduce cost and results in customers have an inexperienced team, on an older version of the technology and changes becoming very difficult.  It becomes more of a “keep the lights on” their transactional HR system and I have seen first hand many occasions where even that becomes a challenge. Once these customers have had enough and compare their existing solution set vs the functionality that the leading cloud HRMS systems are offering they become prime candidates to make a change even though as you correctly stated it will be a totally new re-implementation.

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  9. Linda Chan

    Can EC hoste to multiple different payroll systems? or it must be from SAP HCM?  for customersiation PCR and Schemas etc – this is only can be done by sucessfactor developer ?

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    1. Jarret Pazahanick Post author

      Hi Linda

      Employee Central has integration with Employee Central Payroll and SAP Payroll both of which are the same offering (ECP is hosted by SAP) and both of which allow customization of the schema and rules by whoever is granted the appropriate access (ie Customer, Partner)

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  10. Andres Martin Melchor

    Great post! Thanks a lot to everyone for interesting discussion and specially to Jarret. ➕

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