With the launch of the latest cloud payroll solution from SAP & SuccessFactors it’s as good a time as any to revisit the questions of what are SAP HCM customers next steps in light of the SuccessFactors acquisition, new cloud payroll solutions, and other devlopements.
In case you missed our interview with Jarret Pazanick (@SAP_Jarret) back in June, here is the transcript. Jarret shared his thoughts on SuccessFactors, fresh off of the SuccessConnect show earlier this spring in this conversation with my SAPexperts colleague Andrea Haynes.
You can listen to the podcast or read the transcript here:
Andrea Haynes, SAPexperts: Hello, this is Andrea Haynes with SAP experts. I'm speaking with Jarret Pazahanick. Jarret is managing partner of EIC experts and an HCM certified consultant who has specialized in SAP HCM since 1998. He has written numerous articles on the employee interaction center for HR experts. Today, we'll be talking about success factors in his HR cloud offering. Welcome, Jarret.
Jarret Pazahanick: Thanks for having me, Andrea.
Andrea: Let's start with what your impressions are from the SuccessFactors show in San Francisco last week.
Jarret: I was lucky enough to be able to attend my first Success Connect, and I found it very informative. It was really interesting to hear the plans that SAP and Success Factors has for Employee Central. For SAP folks, it's sort of equivalent to the core SAP offerings like PA, OM, payroll, benefits, and time management. It was very interesting to hear that SuccessFactors has recently on‑boarded 200 developers from Waldorf that are going to start working on building out Employee Central.
To me, one of the key themes was the commitment that SAP is making to build out that product. It was also really interesting to see the focus that SuccessFactors has on mobility.
It was stated several times that Lars has instructed the products team to think mobile first. Everything is designed with that in mind, which is, I think, a great approach - just the overall excitement, the speed that they're delivering technology, which was very impressive to me.
Andrea: While you were in San Francisco, you commented on your impressions from SAP customers. Was there anything that surprised you? Do you have any insights that would clarify the HCM roadmap for SAP customers? For example, with so much that's new, how do you make the right choices as a customer?
Jarret: That's a great question. There weren’t as many SAP customers at the show as I thought there'd be. We didn't get an official count, but I'm thinking somewhere in the 15 percent range. Something tells me that, over the coming years, more and more SAP customers will start to go to this show. I think SAP's done a great job overall of clarifying the roadmap and where they're going to innovate going forward. I think the hardest thing for SAP customers is going to be determining what technology solution meets their business requirements.
For talent management, for example, SAP has been very clear saying that the solution that they're going to innovate going forward is going to be SuccessFactors. So I’m just really encouraging customers to go out, to really look at both the SAP offering, at the SuccessFactors offerings. Look at their business requirements and try to do some analysis to figure out which one will meet the requirements the best.
At the core, it really comes down to having information. When customers are armed with that information, they make smarter business decisions.
Andrea: Do you have some examples of the big questions that are still lingering that you think HCM customers need to ask?
Jarret: They really need a little more visibility on the integration. SAP's come out and is going to deliver integration in four or five waves, but the first wave of integration is pretty light in my opinion. I think customers have to get a little more clarity and comfortability on how exactly SAP plans to integrate core SAP in SuccessFactors, because I think that's initially what customers are going to be looking at.
Existing SAP customers are going to say, "How can I leverage some of the talent management, compensation management, performance management that SuccessFactors has?"
Longer term, I think there's going to be customers that are going to consider moving their entire software suite to SuccessFactors as they continue to build out Employee Central and payroll and time and some of those other areas.
Andrea: Recently, you wrote about five key areas. Could you tell us some more about the upcoming SuccessFactors payroll cloud offering?
Jarret: Yeah. This was one that surprised me when I first heard about it at SAPPHIRE. In July, SuccessFactors is going to offer cloud payroll for 10 countries. They're going to deliver this is they're going to take the SAP payroll, the current SAP on‑premise payroll, and they're going to host that for customers in the cloud.
It's a bit of a hybrid approach. They haven't built a new payroll offering which, if they did, would be very complex, take several years. The architecture's going to be a little bit different than SuccessFactors has had in the past, because all the SuccessFactors products are multi‑tenant fast, and this product is going to be hosted.
There's some good and some bad with that. I think one of the good things is that I think the SAP payroll solution is one of the stronger solutions in the marketplace. Tried and true. Thousands of implementations worldwide. Talking with the folks at SuccessFactors, the plan is to have 51 countries, which is what SAP has in on‑premise, in the cloud over the coming year.
One of the key things to note is, customers in order to use this new cloud payroll will have to use the SuccessFactors Employee Central product.
Andrea: Getting back to mobility, you see a challenge for SAP when it tries to explain why on‑premise customers need a complex mobile structure, but with SuccessFactors they can get it for free. Could you expand on that comment?
Jarret: That's one of the things I've been harping on for about a year and a half. A lot of the software as a service vendors, including SuccessFactors, Workday, and others, offer mobility as part of their base subscription. Once you sign up to use their software, you get to use all their mobile functionality. It was mentioned multiple times at the SuccessFactors conference - it's hard to have a modern user experience without mobility.
That's one of the reasons that Lars has said, "Mobile first.” Everything we design, every product we design, let's look at how it will appear on a mobile device or on an iPad, and then build the functionality out from there.
That's personally where I think the future is. I think more and more customers are going to be accessing HR software through tablets or mobile devices, which brings me back to SAP's strategy.
What SAP's been requiring their on‑premise customers to do is to make an investment in side base for HR or for the HR apps, Gateway and some other technologies, all which come with very expensive licensing.
If I was an SAP customer, I would start to say, "Wait a second here. If I get SuccessFactors, I'm getting the functionality I need - plus I'm getting mobile, whereas the on‑premise customers are having to get multiple licenses to get that same functionality."
Longer term, I just question how SAP is going to explain that out to their customers, because it sort of feels like with the way the mobile offerings are structured right now, it's advantageous for customers to look at SuccessFactors.
Andrea: Would you explain the new data framework that you saw in action at SuccessFactors and why you're so excited about it?
Jarret: It was pretty neat to see. I mentioned earlier that the SuccessFactors conference has a lot of business folks there and the content is really geared towards business, so this last session I attended was a really technical session. It was covering the new metadata framework and objects functionality that SuccessFactors is going to roll out next year.
Not to get too technical, what it will enable customers to more easily configure SuccessFactors. One of the things that, for many years, people have assumed with software as a service vendors is you have to take what they give you. You have no ability to really do heavy configuration with an SaaS vendor. Everyone has to use the same.
What I saw with this technology really opens it up for customers to be able to configure the system in the ways that meet their business needs. That was really encouraging to me. To go a little further with it, some of the things that would actually involve development on the SAP side could be done by a configuration with the functionality I saw.
It really just opens up the possibilities for customers to get more value out of their SuccessFactors systems.
Andrea: I've been reading about the HR technology team you set up for the Leukemia and Lymphoma Society's Annual Fundraising Walk – and I don't want to let you go without asking you what inspired it and how people can become involved.
Jarret: At the end of the keynote, Lars Dalgaard, the founder of SuccessFactors, went a little off script and he started just talking about some of the personal challenges that his family was having right now and with his two and a half year old son. Having two kids myself‑‑a five and a six year old‑‑hearing that just struck really close to home.
When I got back, I wrote the article on my experience at the SuccessFactors conference, but that just really stood out in something I wanted to try to do something about.
I volunteered to do the leukemia walk coming up. I think it's all over the country, but I'm going to do one here where I live in Texas in early October. I set up a fundraising page for the HR technology industry, so I hope anyone that's listening considers making a donation for this really worthy cause.
Andrea: Thank you very much for giving us all this information about SuccessFactors.
Jarret: Thanks a lot, Andrea. Thanks for having me.