A Tale of Two Vendors!

When Workday started gathering steam (or should that be water vapor?) in the cloud, the on-premise HCM giants responded. SAP bought cloud talent-management-suite-vendor SuccessFactors for about $3.1 billion in 2012, and Oracle quickly followed suit, even after releasing Fusion five years earlier, by acquiring Taleo for $2.2 billion.

SAP maintained the brand equity of SuccessFactors, not to mention the loyalty of its thousands of customers, by keeping the company name: Both on top of the office tower right off Highway 101, the traffic-clogged spine of Silicon Valley, and in communications. After some initial fumbling around it has been “SuccessFactors, an SAP company” for years.

This did not extend to e-mail domains or the sometimes maddeningly matrixed organizational structure of SAP at the time. The heads of product strategy, of all the engineers in software development and of marketing did not report to the SAP SuccessFactors president, but to bosses in Germany or to SAP senior executives in the U.S. Only one long-time SAP executive, David Ludlow, took a major role in the acquired company.

That’s now changed, at least at SAP SuccessFactors, which has the general-manager model PeopleSoft used in the ’90s, with all those leaders reporting to the new president. That person is SAP veteran Greg Tomb, who also has sales.

More importantly, after the acquisition, SAP could not urge its on-premise software modules onto the cloud acquisitions. Although the company did grab the social-networking-software providerJam from SuccessFactors; the newcomer got its 42 country payrolls from SAP (watch this space for more) and all the cloud acquisitions committed to adopting the UI guidelines called Fiori–at various speeds.

The other four SAP cloud acquisitions–Fieldglass (for contingent agencies), Concur (for employee expenses), Arriba (for procurement) and Hybris (for e-commerce)–developed and used their own software. The notable exception were the hundreds of engineers in Germany SAP assigned to build out SAP SuccessFactors core cloud HR module, Employee Central, which allowed it to catch up to Workday in five years (coming from six years behind) and now has more core HR customers than Workday (though many are smaller and have fewer employees).

All five cloud companies are supervised by Rob Enslin, a South African and one member of the Executive Board, which runs SAP. At the Influencer Summit in May, he announced that the five will be integrated into a suite, which could offer some stunning benefits, but with no details on how that particularly knotty problem may be solved. I remember years ago an independent Concur had its own suite with two other functions, which failed. But these five are all now considered best-of-breed applications.

Most importantly, SAP SuccessFactors for the first time will start using more SAP software (now written for the cloud), particularly SAP Analytics Cloud. Head of Products Amy Wilson said the smaller company is “getting out of the analytics business.” Its analytics group in Australia, a company acquired more than a decade ago–Inform or originally InfoHRm–will combine its assets into the new total-workforce- management functionality.

In a word, expect more synergies among the mother ship and its flotilla.

Amy detailed at the Summit the new functionality coming up, and at SAPPHIRENOW in June, SAP’s huge user conference, Rob revealed the roadmap for how these new products will add intelligence to SAP SuccessFactors applications, quarter by quarter. The second is important because with so many products, the competition for air time at the user conference is intense and what you hear about reveals SAP’s priorities.

SAP has created CoPilot as a platform for digital assistants or chatbots, using the Google speech-recognition technology that can be found in Google Home, the in-your-house spy device. Now, the next step of software knowing how to act on those correctly recognized words (natural language processing) is a separate challenge.

By the end of this year, SAP SuccessFactors plans to have sophisticated digital assistants for the new onboarding product, timesheets and learning. By mid-2019, chatbots will be available for fairly complicated manager self-service and recruiting transactions, according to Amy, who details them as a guest on the July 24 episode of Firing Line with Bill Kutik®. All part of what she is calling “The Intelligent Suite.”

At SAPPHIRENOW, Rob also announced total workforce planning, more intelligent recruiting with new resume matching, and embedded insights and total workforce analytics via the SAP Analytics Cloud. All by the end of 2019.

Earlier at the Summit in May, President Greg Tomb reported selling 866 new Employee Central customers in the last year (10 months on his watch), bringing the company total to 2,450.

Separately, not quite as brilliant as the Apps Unlimited program at Oracle–the promise to support on-prem PeopleSoft Enterprise users more or less forever–Greg mentioned that SAP has extended on-premise support from 2025 to 2030 for certain applications.

This is subtle enough to require an expert following the company full-time like systems integrator Jarret Pazahanick, who explained it for on-prem customers, expanding on this column in his LinkedIn group “Global SuccessFactors and SAP Community.” He wrote:

“Unfortunately that support (at this time) involves SAP HCM/Payroll customers doing an upgrade to SAP S/4 HANA Sidecar which is tentatively planned to be released in 2023. My take is this will never see the light of day as SAP will ultimately change the whole Business Suite to 2030 and SAP HCM customers will be able to “go along for ride” (although they will be riding with 30-to-40-year- old software).

The point is nobody’s getting pushed to the cloud, which is a recognition of how slowly large companies are adopting the cloud.

At the start of HCM cloud software sales, the major vendors estimated there were 25,000 big HCM on-prem customers globally. Now by their own reports, they have switched at most a third of them to the cloud–after 11 years of selling (each for Workday and Oracle) and five for SAP SuccessFactors.

Amy has taken up the increasingly popular mantra that HCM needs to be creating awesome experiences for employees and managers and delivering functionality for people, not the HR department. Continuous performance is now an employee-driven experience. Onboarding will have three channels for completion: mobile, desktop and conversational. New engagement tools are available this year, as well as candidate relationship management, which the company has needed for a while. Jobs2web, the star talent acquisition application acquired years ago, will be used to build career sites.

She also announced a single solution to manage all visa and permit processes for multi-national organizations, a huge part of SAP’s installed base.

Unfortunately, everything James Harvey, senior vice president and new head of engineering and software delivery operations, said was under non-disclosure. Lots of impressive numbers he’s delivered after only a year on the job. He did say a newly unified new architecture would eliminate any lingering instances of two copies of data and deliver one service for all. But you can watch his five minutes of fame right now on Firing Line with Bill Kutik®.

Bill Kutik
HR Technology columnist Bill Kutik, as chairman emeritus, is at the 22nd Annual HR Technology Conference & Exposition® in Las Vegas, Oct. 1-4, 2019. Watch Kim Billeter, the new Americas Lead for EY HR advisory group (PAS), discuss the question: Why is Cloud adoption taking so long? Just six minutes for the current video episode of Firing Line with Bill Kutik®. Bill can be reached at hreletters@LRP.com.