The Future of SAP HCM and SuccessFactors Consulting – 2014
It has been another very eventful year in the SAP HCM and SuccessFactors world, since a group of my friends and I collaborated to write The Future of SAP HCM Consulting and SuccessFactors – 2013, and a lot of people continue to reach out to me trying to understand what lies ahead. From an HR perspective I have no doubt we are we are in the early innings of the multi year shift from client server OnPremise software (i.e. SAP HCM, Oracle EBS, PeopleSoft) to the next generation cloud based offerings (i.e. SuccessFactors, Workday, Oracle Fusion) and I recently provided some deeper insights in a fun radio interview I did for DriveThruHR. It should come as no surprise that SAP is now leading with their full SuccessFactors HCM Suite, which is the new brand name for what many know as Employee Central and BizX, in most deals. They are even replacing SAP HCM internally with the SuccessFactors HCM Suite and are in the midst of an implementation as we speak.
There has always been a delicate balance within the SAP HCM Consulting market and this shift to the cloud has started to have a huge impact on the traditional SAP HCM consulting market. I am seeing a lot less opportunity and some billable rate compression in the SAP HCM space as well as some disruption with several of the traditional consulting companies. On the flip side virtually every consulting company is looking to add experienced SuccessFactors resources as well as re-train their existing consultants on the new technology, but customers need to beware some have likened the current environment to the Wild West. While there will continue to be some small pockets of strength in the SAP HCM market in various regions and modules, the combination of the product roadmap being squarely focused on SuccessFactors, SAP sales teams leading with the Cloud (for HR), continued off-shoring, faster implementations (RDS) and serious competitive threats from Workday and others make it very likely the OnPremise SAP HCM consulting market is headed for a real slow down.
I decided to reach out to a diverse group of individuals that I personally know and trust would give an honest and no BS option in their respective areas to get their thoughts. They include SAP HCM and SuccessFactors Industry Experts, SAP Mentors, SAP Press Authors, HR Expert authors, well known conference speakers and all around top-notch people I have a lot of respect for and their opinions. Enclosed were their thoughts on where things currently sit for each of major areas of SAP HCM and SuccessFactors:
Employee Central and SAP Core HCM
“SuccessFactors Employee Central has made long strides over the past year. The product management team has done an excellent job listening to the customers and that has accelerated Employee Central in the direction of becoming a true global HRIS. There have been advancements in key functional areas of the product such as Position Management, Global Assignments, Time Off functionality, and Extensibility. As promised the Metadata Framework has been further enhanced providing customers with more configurable options to cater to their unique business requirements through the Rules Engine. New Hire, Employment Change, and Termination workflows are now available on mobile devices further enhancing the accessibility and productivity factor of Employee Central for customers who don’t want a heavy investment in SAP Mobile infrastructure. A key area of interest for me has been the pace at which Employee Central has come to deliver the solution for 58 countries in 37 languages. This has seen a distinct upward trend in the solution being adopted by global customers, particularly with customers who are replacing SAP ERP HCM and PeopleSoft with Employee Central.
Employee Central Payroll continues to be a viable option for Employee Central customers who are not currently using payroll or need to upgrade from a legacy solution and further country versions has taken the total to 25 countries, with UI mash-ups available for 15 of those countries. Further integration between Employee Central Payroll from both a UI perspective (configuration and monitoring options are now available in SuccessFactors OneAdmin UI) and a data perspective mean that overall value is growing. There are still no signs of a genuine SaaS payroll solution from SAP/SuccessFactors and still no real business case to replace SAP ERP Payroll with Employee Central Payroll.
The market has been particularly lively as the year progresses and there was a great deal of interest in the two Employee Central expert’s panels at SuccessConnect in the fall. This coming year promises to see continued upwards interest in Employee Central and a downward trend in investment in new implementations of SAP ERP HCM. Although customers will continue to use and invest in SAP ERP HCM, SAP are unlikely to focus much of their innovation budget in this area with such a high investment being made to Employee Central. With a strong and detailed roadmap for 2014, the continued expansion of the Metadata Framework, and the introduction of an Employee Central extensibility package for SAP HANA Cloud Platform Employee Central is becoming a more and more viable option for customers looking to take their core HRIS into the 21st century.
“As with 2013, SAP continues to invest in its on-premise core HCM offering with HR Renewal and HANA. There have been, and I would expect to continue seeing incremental improvements in the software. As always, consultants and customers need stay up to date with those changes by reading the SCN forums, SAP notes and release notes. SAP Payroll consultants can still benefit from getting involved in SAP’s Cloud Payroll product, and on-premise consultants in general can benefit from learning more about SuccessFactors Employee Central. The momentum for Employee Central is increasing, but there will remain many customers needing help with on-premise SAP HCM for years to come. On-premise SAP HCM core consultants will see an increasingly hybrid landscape in the coming years, so it will pay to get involved and leverage your existing skills to deliver value to clients in that environment.”
SAP Performance Management and SuccessFactors Performance and Goal Management
I spoke with Chris McNarney who is the owner of McNarney Consulting and who I profiled last year in How to Transition from a SAP HCM to SuccessFactors, and he told me:
“First we look at SAP on-premise Performance Management (PM). If you know a project just getting started implementing SAP on-premise PM then you should probably see if you can also sell them all of your old MC Hammer CDs (don’t act like you don’t own any!). There are likely a handful of support consulting opportunities out there for already implemented projects, but you could shake a tree these days and find an HR customer with an on-premise ERP HR PM solution who is tired of living under IT’s thumb and is “looking into” a SaaS solution to replace it. Bottom line here – and probably not an earthshattering revelation to any consultant – is that the end of the line is probably upon us for consulting in SAP on-premise PM.
Much like the rest of the SAP HR talent world, we’ll turn our attention to SuccessFactors. I’ll avoid the dreaded “flipping switches” term this year to keep the pitchforks at bay, but I expect the same things that happened in 2013 to persist in 2014. Continuing from last year it seems clear to me that SuccessFactors is intent on removing a client’s dependence on Provisioning and instead allowing those changes within a customer’s own instance. For instance, each release you can see more and more PM configuration coming out of XML and arriving in the advanced configuration settings of an instance. Additionally, the Metadata Framework (MDF) will continue to make its way into the PM and related modules as they have already with things like Competencies, Job Profiles, Job Families, and Roles. Lastly on this point, you can see that each release the Upgrade Center becomes a more commonly used vehicle for SuccessFactors to push out new functionality. In many cases, the Upgrade Center will automatically make provisioning switch changes on a customer’s behalf if they elect to utilize the new functionality.
Another concept that I maintain is an eventuality of SaaS solutions is the equivalent of BAdIs in SAP (disclaimer – this is purely my own opinion). HANA Cloud Platform (HCP) is probably the major step towards that. Currently though HCP offers extension of applications and doesn’t currently affect the core logic of an application like PM/GM, etc. In the future I see this option as an opportunity for a good consultant & customer to be creative in handling unique business requirements in a module such as PM/GM. Right now there are plenty of ‘configurable options’, but the reality of being on the ground in any implementation is that however many configurations exist right now in the product, it’s not as many as the customer really wants.
From a pure consulting perspective as well as purely my own opinion, I see 2014 continuing a trend of vendors trying to ramp up capable SuccessFactors staff. This will keep overall project bids low with super slim SOWs that all too often don’t reflect the reality of the actual implementation. I have mentioned this point previously and I don’t think the reasons fit into this thread, but suffice to say that I currently see a bit of a disconnect between available functionality options, client requirements and client expectations, however I don’t see this issue going away during 2014. Going further, I don’t see the SuccessFactors certification being particularly useful to a consultant but I definitely see them being useful to the vendor who employs/contracts with that consultant in order to secure projects that of course indirectly makes the certification important to a consultant. In my own experiences I also see a burgeoning post implementation support market coming with clients who don’t rely on IT, or have one person to support the entire product for configuration won’t always be able to keep up with a myriad of CSV imports, quarterly changes and support requests. Generally speaking – I’d say this means to not end on a bad note with your clients at the end of an implementation. A good move in general, but especially true in this case.”
SuccessFactors Succession and Development/SAP Talent Management/Nakisa
I spoke with Luke Marson who is the Director of Cloud HCM & Technology Solutions at HRIZONS, fellow SAP Mentor and co-author on a recent best selling SAP Press book called SuccessFactors with SAP ERP HCM and he told me:
“It’s not been a great 12 months for Nakisa, although the decline actually started before the acquisition of SuccessFactors and has been compounded since then. Nakisa have not always been the best business partner and as a result a number of partners have changed their focus to SuccessFactors. Without a solid ecosystem backing them Nakisa have lost a vital source of customer exposure and coupled with low end-user innovation and SAP’s strategic direction then you can see why Nakisa are not doing so well. Their latest Performance Management solution and their mobile application are not SAP-certified so they now have a situation where they are licensing direct with customers and this takes away one of the benefits they had as an SAP-supported solution.
In terms of the rest of SAP’s talent management and succession management suite, there really isn’t much to write home about. Without any significant investment since Enhancement Package 4 and with SAP’s go-forward solution being SuccessFactors then this market has really taken a nosedive. Although robust, SAP’s succession management was never a best-of-breed set of applications and it makes sense that customers have looked at SuccessFactors. SuccessFactors have invested in Succession & Development and also have some new Talent Review functionality coming out. They are working on adapting a similar competency model to SAP so that position-based competency requirements can be used in different parts of talent and along with the new Talent Pool functionality the suite is moving in the right direction. Although it still lacks a comprehensive position-based competency profile match – this will be possible once the competency model has been released – there are quite a number of functionality enhancements coming in the first 3 releases of this year. Based on what I’ve seen of the innovation and the market, I firmly believe that the growth is clearly going to be with SuccessFactors and this is where I would recommend that customers and consultants put their focus”
SAP and SuccessFactors Integration
“On the demand side, judging from the customers I’ve talked to, a large percentage of core SAP HCM customers are looking to either begin or expand their use of SuccessFactors for Talent Management. This means integration experience will be in high demand. On the functional side, consultants with a deep understanding of the SAP HR data structures and BizX Provisioning/Administration is sure to be the “white rhino” of the SAP consulting landscape. On the technical side, consultants with experience with the middleware will be in demand as well. The “X-Factor” on the technical side will be seeing how quickly customers warm to the Hana Cloud Integration (HCI), which is still in only limited use in SAP/SFSF hybrid deployments and carries an incremental 7.5% cost. The fallback is use of On-Premise Process Integration (PI) middleware. Regardless of approach, customers will want to employ expertise to establish the initial connectivity between SAP HR and SuccessFactors; so technical middleware skills will meet high demand as well.
On the expertise supple side, I have spoken with multiple customers who are frustrated by dearth of resources who understand both the SuccessFactors and SAP sides. The reality is that many customers will be forced to work with consultants who will be learning as they go. My advice to these customers is to ensure that their consultants have a track record on either SuccessFactors or SAP and that the consultant has a network of contacts that he or she can rely on to help him or her fill in the gaps.”
SuccessFactors Compensation and SAP ECM
“As with other talent management functionality, SAP/SuccessFactors will spend the bulk of their investment dollars on enhancements to compensation functionality in SuccessFactors. SAP’s on premise ECM (Enterprise Compensation Management) offering will continue to be supported in the future with minor enhancements based on feedback from the Customer Connection program. For some additional insight into the two offerings, you can read the debrief of a recent online Q&A I did with SAPInsider.
What is less known by consultants (and customers) is that SuccessFactors Compensation is actually composed of two different modules: SuccessFactors Compensation and SuccessFactors Variable Pay. (In fact, there are two separate training courses as well if you are getting trained). SuccessFactors Compensation supports the annual (focal) worksheet planning process (merit, MBO bonus, equity) through the more traditional “pay-for-performance” model. SuccessFactors Variable Pay, on the other hand, supports short-term incentives with more complicated calculation schemes that include quantitative business performance and employee performance measures. You can implement one without the other, or both at the same time, for a customer.
It would certainly behoove all compensation consultants working in SAP to learn both SuccessFactors offerings – SuccessFactors Compensation and SuccessFactors Variable Pay – in addition to their knowledge of SAP Enterprise Compensation Management (SAP ECM). Regardless of deployment model, it will be the consultant’s expertise in the compensation domain, as well as the ability to bridge together functional and technical knowledge that will make him/her successful in the marketplace”
SAP HCM Mobile, SAP Fiori and SuccessFactors Mobile
Many of folks in this article have multiple areas of domain expertise but only Jeremy Masters was lucky enough to get two sections. Here is what he told me:
Enabling robust mobile functionality for any business process is a challenge. Within SAP HCM, mobility is of a particular challenge to consultants since there are so many offerings within the on-premise area. Some SAP HCM mobile applications (i.e., those apps connected to a customer’s on-premise SAP system) are available on the SAP Marketplace but have received largely a cold response from customers. The reason is mostly around cost, including the amount of infrastructure needed to support these applications using the SAP Mobile Platform (previously known as the Sybase Unwired Platform). Consultants with a technical (i.e., programming) background will see more activity in these types of projects rather than a functional HCM consultant. As a side note, vendors and consultants who have provided more lightweight solutions (which rely on web services and other open APIs) and have fared better with engagement with customers.
SAP Fiori has made a decent entrance into the marketplace largely due to its friendly UI, more aggressive pricing, and its lightweight approach of serving up employee and manager self-service applications on device (and on desktop!) through a modern HTML5 presentation layer. During TechEd this past year, Dr. Vishal Sikka, Head of Products at SAP and on Executive Board, outlined his vision of the “SAP Fiori UX Paradigm” (being that SAP Fiori could be ‘the umbrella’ for a customer’s cloud and on premise applications!). I don’t see customers going this far with SAP Fiori in the short term but it’s important to understand Sikka’s vision as a consultant since he does drive the overall product direction for SAP.
It’s wise for SAP/SuccessFactors HR consultants to learn more about SAP Fiori, despite the fact that only 7 out of the 190+ apps are HR-focused. You can read more about SAP Fiori here. It is important to note that even though SAP Fiori is listed here in the mobile section, you can see that SAP Fiori is a concept with a wider scope than just mobile. And one final note: for consultants implementing SAP Fiori, experience with installing and configuring the NetWeaver Gateway will be of utmost important since it’s an essential part of the technical set up.
Mobility within SuccessFactors, by contrast, is relatively straightforward since there is only one mobile application that contains all of the functionality. The SuccessFactors native mobile application is available for iOS, Blackberry, and Android operating systems but there is no current support for Windows OS. As a consultant/customer, there are few administrative tasks to know including how to enable the employee profile, org charting, analytics headlines and other functionality within the OneAdmin tool (administration console). You can also manage the mobile users and their connected devices here as well. There is functionality-specific configuration too, such as configuring which fields should appear on the mobile goal application. For consultants, there is no training course for mobility within SuccessFactors since most of the functionality is already set up and just needs to be configured and managed via OneAdmin.”
ESS/MSS and HR Renewal
“Time still in motion, customers, vendors and consultants are still gathering options to empower employees and managers through self services. I have found throughout my different assignments in Europe and Middle East that no ‘common rule’ can be found. When Master data is still a challenging questions as I underlined last year ‘Where do we consolidate the HR data and which user interface do we put in place. Customers and the eco-system are answering these requirements in many ways and are still gathering, as well as building the ‘best practices’, for setting up the primary layer and foundation and the Master Data either through SAP ERP, in the cloud, through HANA, through Employee Central and SuccessFactors’, the primary focus I have come across, and in my humble opinion, equally important matter: the end user interface. The HR Renewal still carries on through the delivery of the Enhancement Packages concept and add-ons. Options still do persist with the temptation to select SuccessFactors as end user interface.
Through 2013, I have witnessed a transition in the Self Services whereas my customers have assessed options and are now keen to move to deployment.
- Migrating the Universal Worklist (UWL) into the Personal Object Worklist (POWL)
- Migrating Self Services to NetWeaver Business Client (NWBC) interface
- Enabling new Services as ‘standalone’ through NetWeaver Business CIient (NWBC) when before it was just too much hassle from a technical point of view (not to mention from a budget point of view) to deploy one service.
- Empower employees and managers through Talent Management latest functionalities.
In conclusion, I would say that the best is still there to come, with many promises and bright future for the end users service delivery. I trust our enthusiasm made us believe that deployment would run faster but it seems that reality of deployment can be sometimes different from the vendors time to market delivery. Thus functionalities are still being deployed and technologies assessment being made. Therefore, I see a growing demand on skills across the different possibilities offered by the market. There is no right or wrong choice as long as you are aware of all the consequences of your choice. It is quite important today to relay on these consultants that have seen SAP growing along with its new functionalities and acquisitions, to fully understand the potential scope of your project. Meanwhile, let’s keep challenging SAP and the eco-systems with new ideas and requirements so that we can always fulfill the end users journey.”
SuccessFactors Recruiting Execution (Rx)
“Prior to last year I was a little skeptical of the then immature Recruiting Management (RCM) product and the fact that SAP were pushing it as the go-to solution despite it not meeting many basic needs. I’m pleased to report that quarterly updates with aggressive improvements have alleviated most of my concerns. 2013 was largely a year for competitive catch-up (e.g. resume parsing, flexible email template selection, user interface improvements). SuccessFactors RCM is a totally suitable solution for many organizations that have the same 80% requirements. The first release of 2014 (1402) shows more of the same, with the long-waited arrival of application sub-statuses, pre-defined offer approval routing, and job profile builder integration. The general theme of the rest of the year seems to be usability improvements for both candidates and recruiters, as well as incremental enhancements to existing functionality. The UI improvements are very much needed.
In terms of 2013 customer adoption, including switch from on-premise E-Recruiting to RCM, my expectations were far exceeded. When the Metadata Framework fully supports recruiting, I’d like to see how it (along with HANA Cloud Platform) is leveraged by customers and partners to fill that other 20% of requirements. This will likely occur with vertical add-on solutions and new complementary applications rather than the typical on-premise “tweaking” of existing functionality. Time for everybody to relearn Java! (Again).
As the former Jobs2web solution was already quite mature, a lot of the focus has been and will continue to be on Recruiting Management (RCM). Last year and 2012saw developments in the area of real-time integration between Recruiting Marketing (RMK) and RCM, for both job postings and social employee referrals. A user interface overhaul was also achieved to better render career pages on different devices. 2014 will see integration of “Apply via LinkedIn” (and Facebook) functionality from RMK to RCM. A promising trend for both RCM and RMK is the increased self-service configuration and administration available to clients. For RCM this means, for example, managing recruiting templates in Admin Tools instead of editing XML files that have to be loaded through Provisioning. For RMK this means, for example, changing SEO, themes and brand content, as well creating additional landing pages. The more clients and consultants can do without dependence on SuccessFactors engineering, the better!”
SuccessFactors Onboarding and SAP E-Recruiting
“SuccessFactors Onboarding is still a very new module. The first release focused heavily on the social side of bringing new employees into an organization; on capitalizing on the excitement a new employee feels about starting a new job to make the first days and weeks in the new company as smooth and enjoyable as possible. An example of this is the SuccessFactors Onboarding mobile app that enables new hires to interact with their new company and team prior to their first day on the job:
- Get to know the team – pictures and contact information for important people allows them reach out with any pre-hire questions and to recognize some familiar faces when they show up for work
- Get to know others in the company – proposal of other people they should get know, not just restricted to direct team members
- Learn schedule for first week(s) – you can push information to new hires about upcoming meetings on first day / first week so they know a bit more what to expect
- Map functionality – makes use of integrated map functionality on mobile device – who wants to get lost finding their way to the office on their first day?
In 2014 we will see SuccessFactors strengthen some of the core functionality around forms and task management, making the administration more robust and flexible while at the same time working out some of the kinks from the first releases. Although there already is some basic integration with SuccessFactors Recruiting and Employee Central, this will also be built out more and potentially also include integration to Learning so that training can be assigned and tracked as part of the onboarding process.”
In terms of on-premise SAP E-Recruiting there has been a significant drop-off in projects. Client investments have been in the areas of upgrading, extension of existing implementations with additional custom functionality and optimization of existing solutions. Consulting opportunities in the above areas have been mostly but not exclusively in the area of public sector.”
SuccessFactors Reporting and Analytics
“In the past year, SuccessFactors Reporting and Analytics has seen some major advancements in improved visualization capabilities as well as broader integration across the BizX suite. The ease of highlighting KPIs and proactively mining the data is bringing a new level of awareness to managers and leaders into their workforce data. It is also allowing HR professionals to leverage the software to tailor reports for varying audiences allowing them to allocate their time to more value-add analysis of the findings rather than just collection of the data.
With these developments, also brings a new set of challenges. Customers continue to look for guidance on KPI selection but I am seeing more requests for a consulting partner that can advise on not just what to measure but how to report, interpret, and design actions around findings. The more integrated the reporting and analytics application becomes, the more complexities in data management and design options become a focus for customers. So the requests for a standard reporting suite, KPI identification, change management demand for data synthesis and communication skills remain as they have every year. But the scope of the data and range of audience is so much broader now, that customers are looking for expertise in the software implementation across the integrated suite as well as consulting experience in issue identification to action implementation and comprehensive rollout strategies.”
SAP LSO and SuccessFactors Learning
“As we move into 2014, it is clear that most of our customers (even some of those committed to on-premise solutions just a year ago) are now looking to the Cloud to support their future learning initiatives. This isn’t a surprise, as SAP has clearly stated their development focus for HCM is SuccessFactors and SuccessFactors Learning is generally acknowledged as a best-of-breed learning management system (LMS.) As a learning consultant, it’s imperative to have the skills to support customers as they transition their LMS to the Cloud. At the very least, this requires an understanding of the mappings and deltas between SuccessFactors Learning and SAP’s Learning Solution (LSO) but I would suggest knowing the current integration points between SAP and the SuccessFactors HCM Suite as well as SAP’s go-forward integrations to support costing and qualifications integration between SuccessFactors Learning and SAP’s Financials and Planning solutions is also key.
As far as implementations of SuccessFactors Learning are concerned, there is no denying the fact that they are simpler than implementing LSO from a configuration and an architecture perspective. For example, there is no need to worry about TREX indices or to discuss client infrastructure or server sizing, unless the customer has decided to keep their content on-premise. If the customer is using iContent, then content integration conversations are typically brief. However, it is important to understand that if your customer has complex learning needs, their implementation will still be complex unless they are willing to redesign and align with the solution as delivered. Therefore, as a consultant, the ability to understand a customer’s business requirements, business drivers, vision, go-forward implementation and integration paths, and to translate all of this into optimal processes in alignment with the solution being implemented is still an essential skill. This fact remains true regardless of whether the solution is in-cloud or on-premise.
A final thought as we examine current demand for LSO consulting services: There are some LSO customers who simply do not plan to migrate near-term to the Cloud while others prefer to remain on-premise from a regulatory risk perspective. Most of these customers are now on EhP4 or higher, so there are few incentives to upgrade from a learning perspective. Last year, we saw a large increase in interest within the EU for our RegLearn add-on for LSO and we continue to receive inquiries from customers in other countries. ASUG’s LSO Influence Council worked closely with DSAG and other customer influence groups worldwide to successfully push for the inclusion of LSO in SAP’s Customer Connection program in 2013, and as a result, more than 64 improvement requests for LSO were submitted via this program. Almost half of these requests (31) were qualified by SAP, including proposed improvements to the Content Player, an enhancement that customers ranked high in importance and which SAP acknowledged they would carefully consider. (Incidentally, SAP plans to announce in February which improvements they will add to LSO.) I don’t see these improvements driving significant demand for LSO consulting services in 2014, simply because customers involved in the Customer Connection program or in enhancing their LSO with an add-on typically have the skills in-house to implement these targeted improvements. Therefore, while there will remain a customer base for SAP’s Learning Solution as well as the rest of the on-premise HCM solutions, SAP Consultants should aggressively look at training and project exposure in the SuccessFactors HCM Suite. Make your years of project experience a differentiator for your engagements in 2014.”
There is an excellent quote from Naomi Bloom who is a HR Technology thought leader that is very relevant to this overall discussion and it reads:
“Consultants, at least in my world view, are individuals who are able to study a business problem and, regardless of any particular technology choices, guide the client to the best possible approach to achieving the desired business results.”
At the end of the day, if you are a consultant that is able to provide that type of value for your customers then it won’t matter if you are working with SAP, SuccessFactors or any other HR technology, you will be have the head start at being successful. That said, it is very important whether you are a customer or consultant, that you are aware of the extremely strong momentum in HR towards cloud based technologies. Information is a key competitive advantage given the rapid pace of change in HR Technology, and in order to stay current on all the major news and developments within SAP HCM and SuccessFactors I would recommend joining the 11,300 people in my SAP and SuccessFactors group, try to attend the upcoming HR2014 Conference (March) and the HR Technology Conference (October), as well follow me on twitter at SAP_Jarret.