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Making Sense of the SAP HR Landscape in 2015 Part 4: Where is SAP taking us?

Thus far in the series, we’ve discovered the four camps of customers that exist in today’s HR landscape in part 1.    Then in part 2, we covered what’s going on in the cloud. We then jumped over to the current state of SAP on-premise technologies in part 3, paying particular attention to UI5. Having covered a broad area of what’s out there today, the burning question for many people is: What’s going to happen next?

Given all we’ve covered in this series, here are my predictions for SAP and its customers in the HR landscape over the next few years:

  1. Cloud will still be King – cloud continues to dominate the tech market and is determining which tech companies are growing and which are fading.  It is in SAP’s best interest to continue to encourage their customers towards the cloud one way or another as the years progress
  2. How you get there is up to you – leaving multiple options open for its customers to get to the cloud is a smart thing to do. Most customers will eventually get there, but at their own pace and with their own unique requirements.  As we’ve seen in part 1 of the series, some have already made the jump while others are going to be on-premise for years to come and want some reassurance they are making a sound financial decision before taking the plunge.  SuccessFactors is not the only option out there for cloud and I think we will see more emphasis placed on other options as the market of SAP customers jumping on SuccessFactors stops peaking.
  3. Don’t discount on-premise – there is still investment by SAP in this area as can be seen in developments like HR Renewal and Fiori that run on UI5.  If SAP is as smart as I am giving them credit for, there is a good reason they are ushering people towards UI5 technology in this area.  More on that in a minute.
  4. Watch for the silver bullet – the real “silver bullet” for SAP will be a way to usher all of its customers into the cloud no matter which camp (cloud, hybrid, or on-premise) they have chosen in 2015 investments.

Who is ready to play armchair CEO with me?  If I was running SAP, here’s what my “silver-bullet” company strategy would entail:

  1. Keep the SuccessFactors Implementations coming – it is good business now and will continue to be good money at an exponential rate as more subscription fees are accumulated across more and more customers
  2. Buy other cloud products that are ripe for the taking to fill in your portfolio – the SuccessFactors purchase was an SAP experiment in moving SAP HCM customers heavily into the cloud.  The HCM experiment is going well and people are indeed making the move to the cloud.  Now it is time to expand to other modules.  So what’s the best way to develop a customer base for a cloud Finance or CRM system?  Buy it! Then merge it with your existing technologies.  Classic multi-billion dollar tech company move.
  3. Offer a way for on-premise customers to keep their systems alive in the cloud – hosting systems that have customizations is not as profitable as a generic system that people sign up for and configure like SuccessFactors, but it is a wise investment.  Customers who are hesitant to jump into the cloud would feel a lot better knowing they can keep their existing systems, but in a way that lets them dip their toes into the cloud.  This could be a solution for “ending on-premise support” but not alienating customers who feel they need to keep their systems alive.
  4. Invest in UI5 as a way to unite SAP backend systems and SuccessFactors (plus any other cloud systems you buy)– you can’t serve two masters for very long.  It is much more economical to maintain one platform than two.  Eventually you need to merge your technology.  UI5 is a great way to start that process.

If my theoretical plan was put into practice, customers who invested in UI5 on-premise in 2015 won’t feel like that investment was for nothing if they could transition to the cloud using the same technology to unite them.  In the other camp, customers who invested in SuccessFactors don’t really mind what technology it is running on as long as it looks good and covers the same functionalities.

There is a growing need for a unified platform today.  Look at the “Cloud Payroll” offering.  This offering is essentially hosted SAP Payroll mashed-up with SuccessFactors. The two UIs don’t mesh completely right now.  Aside from showing some basic info like a paystub in EC there’s not really any SAP functions surfaces in the SuccessFactors UI.  What the marketing material doesn’t tell you is admins still have to run a lot off the backend with good old SAP GUI.  It would be a lot more slick if everything was web-based in one look-and-feel.  Then you wouldn’t even have to tell cloud customers what backend system any of it was running on.

It is also technically feasible for SuccessFactors to run on UI5.  OData is pretty flexible and an API could be built while the open source UI5 library is expanded to accommodate on the front end.  Once you’ve got that API piece worked out (oh wait, it exists already!) it is a matter of transitioning the existing SuccessFactors pages over to UI5 (which gives them the new power to run on any device!).  In parallel, you continue to expand the SAP HCM features available on UI5 (oh wait, that’s already in progress with Fiori and HR Renewal!).  Now you’ve got one platform that runs the world’s best payroll and world’s best talent management on a single slick unified user interface.  You can take your time merging the backend systems however you want because the customers aren’t paying much attention anymore to this unexposed technology as they transition to the cloud.  Now repeat for other modules/functional areas.

Sound like a good plan to you?  I am available for the next board meeting if SAP needs a new member.  Unfortunately for my wishful job prospects, SAP thought of this before me and I’m just piecing it together in this series.  UI5 is taking off and partners are already coding in UI5 to make SuccessFactors extensions on the HANA Cloud Platform.  In my opinion it is just a matter of time before SAP transitions all of SuccessFactors to the technology.  In fact, they’ve even announced that Fiori is now the design basis for SuccessFactors going forward!  I think it is then just a matter of time before the backend technologies merge or get covered up in the cloud to the point where we can no longer tell the difference between what is SuccessFactors and what is SAP.  Then the question is, what module is next after HCM?  Let’s keep our ears open at SAPPHIRE to see what else develops!

I hope you’ve enjoyed the blog series!  What else is on your mind?  Post some comments and let me know!

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      Author's profile photo Suresh Datti
      Suresh Datti
      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Hi Suresh,

      Great discussion topic - thanks for point this out!  It does indeed look like another step towards this strategy - particularly number 3 - offering on-premise customers a way to keep their systems alive in the cloud.  They are basically offering on-premise, hybrid, and full cloud solutions of classic SAP optimized for the HANA database.  There's a great FAQ here that covers some of these details.

      Author's profile photo Former Member
      Former Member

      Nice overview. Thanks for sharing

      Author's profile photo Bhabagrahi Sahu
      Bhabagrahi Sahu

      Great information, Thanks!

      Author's profile photo Former Member
      Former Member

      Great insights, in particular I agree with number 2. It is very important to leave customers with different options when it comes to getting to the cloud. On-premise, third-party, and hybrid set-ups are each great solutions that meet specific needs for each kind of company. However, if you do decided to outsource, make sure to go with a SAP Certified Partner like Velocity Technology Solutions for your SAP Hosting needs. Surprisingly, there are only around 15 Certified SAP Partners, so finding the right certified partner for your SAP Hosting is very important.

      Author's profile photo Christopher Solomon
      Christopher Solomon

      haha I like when responses are cleverly disguised marketing plugs. 😉

      Author's profile photo Christopher Solomon
      Christopher Solomon

      SAP played it smart. Acquire then assimilate.

      1. First, get as many (all?) customer on SuccessFactors.
      2. Second, change underlying technology (ie. backend) to HANA platform.
      3. Third, slowly ween them off of the UX/UI they are accustomed too.

      Step 3 is a lot easier due to step 2. It is MUCH easier to attempt such a large change (SF UX to FIORI UX) if all your customers are on the same platform. Can you imagine doing the same for traditional "on-premise" customers? haha That would be a service pack/enhancement pack tangled nightmare of a mess! 😈 And the VERY nice part is that SAP can actually do the same with on-premise in "roll outs", so from the user perspective, they really will not know whether they are seeing SF or on-premise after a while. Now THAT is when things will get really interesting!