I recently had the opportunity to meet and speak with Mike Ettling, the recently appointed President: HR Line of Business at SAP. In this role, Mike now leads both the on-premise and Cloud HCM business areas for SAP. In this Q&A, I chatted with Mike about future of HR, customers, and putting the Service in SaaS.
Thanks for joining me Mike. Could you take a brief moment to introduce yourself and your role at SAP?
It’s a pleasure Luke. I always like to use what I have on my Twitter account: Husband, Dad, supporter of the Springboks, running the leading and only profitable cloud business in HR. Changing how we engage our talent all over the world.
How do you see the current state of HR technology and what is your future vision for SAP?
The current state of HR technology is very exciting and interesting. Obviously there is a huge amount of change in HR at the moment and technology is all about trying to enable organizations to cope with their change. At the same time, it’s also a very challenging environment because there’s so much change, because there are so many challenges, because legacy HR technology has been around for so much time and people are looking for something new. The pressure on making the right decision is higher. The challenge I have is not what is the point B that clients need to get to, but how do they get from point A to that point B? It’s a very exciting time; there’s lots of innovation happening at the moment, but it makes the decision harder for customers.
We want to be the company that creates enabling technology and enables their workforce to be better engaged. It’s all about better engagement. We want to be the company that is the trusted advisor to get from point A to point B, not just the company that sells the solution at point B.
You’ve inherited both the existing on-premise business as well as the SuccessFactors business, which has largely been incorporated into SAP. What sort of challenges do you see on the road ahead and how do you plan to address them?
I’m always the glass half full guy. I always tend to see opportunities more than challenges. I’ll give you an example. How do you integrate the broader part of SAP and how do you leverage 7k sales people in driving the growth and business of the company? There’s a tremendous amount of opportunity going forward. The single biggest thing to get right is going to be that most of the cloud companies started with SME and mid-market customers. SAP is known for serving the enterprise-level customers. The thing to get right is: how do I scale this business to be a natural choice for Fortune 500 companies? The challenge for most cloud companies will be dealing with these type of customers. We are better placed than most.
How does SAP’s overall simplification message fit in with your HCM strategy? Will this impact SAP’s existing messaging around on-premise and Cloud?
“Run Simple” plays right into the market and our software. We think that the whole concept of SuccessFactors is running simple and we’ve been doing it for many years. One of my big mantras is around simplification and standardization through the cloud. I couldn’t have asked Bill to pick a better rallying cry for the company than “Run Simple”. It’s so relevant in the HR world right now.
What are your views on the second S in SaaS: Service?
It is absolutely essential. It is ignored by many of the other cloud players in the market and is misunderstood. I’ve said publicly that we’ll make service a differentiator in the marketplace in the next 6 to 12 months. I fundamentally believe that one of the interesting things in the market is that service in the SaaS world is the opposite side of the coin from service in the outsourcing world. Service in the on-premise world is a totally different point. One reason that SaaS companies struggle with getting the service part right is because they use leaders from the on-premise world. The skills you need are all in the BPO and IT outsourcing service world. It’s one thing doing it for SME and mid-market clients, but it is different thing doing it for enterprise customers of 50k, 100k employees. SAP has traditionally been good at this. This is one area where we take SAP capabilities like MaxAttention, escalation process, etc. and try to deploy them in the cloud world. It’s going to make a huge difference in our positioning in the marketplace.
What are your views on “architectural purity”? Do single architectural models work in today’s world of innovation, speed, acquisitions, and hybrid environments?
I think there is too much hype in the market and too much noise about architectural purity. They’re kind of putting the cart before the horse. Tech is there to enable business and if I want to be a total cynic then I would say look at platforms like Tesseract Payroll Software – which are still running the payroll of major companies – and General Mainframe software – which are still running major financial institutions transactions
Business outcomes and ROI are more important, as is architecture that is scalable and that can create a price point that is effective to achieve those outcomes. It just so happens that one way of achieving that is using the Metadata Framework (MDF) – a single object model architecture – but in 2 to 3 years’ time that paradigm might change. I see too much written by certain analysts in the market that if it doesn’t comply with certain architectural standards it doesn’t suit a client, but I don’t think that is fair. Shouldn’t it be what helps the customer? Shouldn’t it be what benefits them and helps to achieve ROI?
There are often examples of inconsistency with SuccessFactors branding, particularly across SuccessFactors’ own materials. Will this be addressed as part of your simplification?
It is being addressed and is continuing to be addressed. We are not dropping the SuccessFactors brand and we’ve recently designed new brand standards. Our business cards at SuccessConnect Vegas show the new brand logos. There is dual-branding; the strength of SAP and the strength of SuccessFactors have a lot of benefits together. We will continue to use the SuccessFactors brand for our cloud HR business.
We’ve tidied up a lot of our presentation decks and material recently and we are going through a 2nd iteration now. We are also making them more business-oriented rather than tech-oriented. So absolutely there’s a desire to not lose the SuccessFactors brand and a desire to get much more consistency in the materials that we use when we’re out in the marketplace.
One of the big things that this touches on is that I’ve appointed a head of innovation and enablement and I’m building – or re-building – an enablement and innovation and excellence group. They will look after content and all enablement to support people, partners, and sales people. We will centralize this in one group. It has been a bit dispersed over the last 2 or so years before I joined and this has helped create some of the inconsistencies that are being experienced in the field.
With the release of SAP Simple Finance, do you see a synergy with packaging Cloud HR and Cloud Financials?
We play in the big boy’s league when we play with finance. The complexity of the finance we play with is very high. What is important is that there is a degree of data integration that you need between any Finance and any HR system. Org structures need to be passed to finance for approvals and cost center structures need to be passed to HR. We built an integration to on-premise finance that is critical (3rd party systems will never get that right). We will have a tight integration with Simple Finance as well. I don’t believe there is a unique advantage to have a single architecture and data model around finance and HR. I think analysts hype this too much. If you are a small services company, for example, then this could be of an advantage, but that is a procurement decision when it is cheaper to run solutions from one vendor. Yes there will be integration and yes it will be unique, but we play in the big leagues when it comes to finance so it’s not something we need to offer as a combined offering.
How do you plan to address education and training?
There’s a lot of investment going into training. Once the enablement group is up and running we’re going to invest a lot in OpenSAP and we’re going to introduce a SuccessFactors introductory course on OpenSAP. We’re going to leverage all of SAP’s learning capabilities and we need to communicate that better. We’re divorcing the consultant training from the partner certification. Today, consultants can only get training if they work for a partner. We’re going to open that up. Anyone can go and get training, but we’re going to control the quality and control the certification of partners. We want to create a vibrant marketplace for SuccessFactors consultants to invest in their own training. I want someone to come out of college and think “If I can get trained on SuccessFactors, I can get a better job”.
Although my overall experience is fairly positive and some customers have highlighted an improvement with SuccessFactors Support, some customers still have concerns. Do you have any plans to enhance the customer support experience?
Support is something we want to turn into a differentiator. We recently made the commitment to our customers that we are one team here to serve them. We also made two commitments to our existing customers:
- Improved case prioritization based on customer business criticality rather than historic P1, P2, P3 categorization
- Renewed focus on resolution of P3 and long running issues
There are opportunities to improve and we know what it is as we’ve done a large study of customers. They’ve told us what is working and what isn’t. We’ve got a roadmap of what we need to do to be a world class support organization. When I look at customer satisfaction it is improving every quarter. Is it where I’d like it to be? No, but I know where I want it to be. By Q2 next year I hope that our support is going to be very differentiating in the market.
If you could provide one message to SAP ERP HCM on-premise customers, what would that be?
Don’t be afraid. We are here to help you on this journey from A to B. We’re the only player that can really enable you on this journey with a hybrid model. We’re not going to ram rip-and-replace down your throat. We are best equipped to help you on this journey with low risk and high ROI and to ensure that you leverage your existing investment and get those returns at the same time. The way we do this is through things like the hybrid model and maintenance replacement offers.
Thanks for joining me Mike, it’s been a pleasure to talking to you.
Thanks Luke. It was great to chat again and great to catch-up.