A Midsummernight’s Dream: on-premise HR Systems and Competitive Advantage
You want to be able to write like William Shakespeare? That’s easy now: they make replicas of his quill and you can also get paper and ink made to historical specifications. So, sure your next play will be right up there competing with Romeo and Juliet or Macbeth!
No? Well, I often hear SAP on-premise evangelists making a similar argument, when they argue against Cloud solutions in general or SuccessFactors HCM in particular. “If everybody is using the same SaaS solution with no way to put in their own coding, then there would be no way of defending or creating competitive advantage through managing talent” or so the argument goes.
Really? I’ve seen world class HR operating on pretty much plain vanilla systems as well as on heavily customised ones. And I’ve seen my fair share of, say, lower league HR playing on systems with a lot a custom programming just as often as on out of the box solutions.
And thinking back, I’ve done an awful lot of HR ABAP programming myself in the last 19 years – and had even more done by my wonderful team. I may not be the best HR strategy analyst around, but I’d be damned if Mr. Porter would have rubberstamped even 20% of that code as creating competitive advantage. Yes, some of it may have done, some was required due to contractual or regulatory obligations, quite a lot was driving efficiencies. But for sure there was a lot I can’t be particularly proud of: it’s stuff customers insisted on doing instead of change management.
So, yes, I agree that there are cases, where custom programming will add value, but I don’t agree that moving to SuccessFactors at the right time and with the right configuration and transformation will destroy competitive advantage:
- Most objectives can be achieved with the more modern solution without programming, if process changes are considered and changes of mindsets are possible
- A solution easier to upgrade allows you to use the latest technology and out-of-the-box tools creatively to be ahead of the competition
- Where there still is a gap, custom developments are now possible on the HANA Cloud Platform (HCP). But it needs to be done with consideration (and moderation) in order not to shoot down the second point.
- HCP based apps as well as other apps from the eco-system will allow you to build a quite bespoke solution based on out-of-the-box building blocks.
- Personally, I believe we are only at the very beginning of what the network economy will be able to achieve. The other SAP cloud solutions Concur and Ariba are indicating, where the journey might take us. If being different cuts you off from this development, it will most likely differentiate your organisation, but what you’ll be reaping along a 5-10 years timeline is – imo – more likely to be competitive disadvantage.
I’m not advocating that every organisation should switch to full cloud HCM within the next 5 years, but the competitive advantage argument deserves a much more considered use. Otherwise, your argument against cloud transformation, which may be absolutely right for your organisation right now, will be remembered as The Comedy of Errors.