SuccessFactors EC and Cloud HCM Kickaround

A couple of weeks ago I had the pleasure of speaking with Jon Reed and Jyoti Sharma about SuccessFactors Employee Central in a 58 minute video conversation. We touched on a number of topics around Cloud HCM and, specifically, SuccessFactors Employee Central including trends, implementation, the future of consulting, customer empowerment, managing quarterly releases, and the impact of the executive changes that recently took place. Below you can find the video and the key talking points from the video. An audio-only version is available here and on iTunes here.

01:34 Jon: What are you seeing with this whole Cloud versus on-premise HCM? Is there a clear trend towards the Cloud that you’re seeing, or is it still more of a case-by-case at this point?

01:53 Luke: Definitely on-premise is beginning a decline. I think deals are definitely drying up. There’s not a lot of investment – at least not net new investment – there’s some investment still in existing core HR, certainly customers are not going out and investing in a new on-premise core HR system. Some are choosing to stick with what they’ve got for a while, while the Cloud matures. I’ve seen a lot more customers look at rip-and-replace.

14:15 Jon: What is really dictating this trend towards more customer HCM deployments? Where are they finding the value?

14:30 Jyoti: I think the biggest value they are finding is in usability and also supporting and maintaining the system. Usability because so far the HR has been doing stuff, they’ve been doing all of the administrative work. However, the employees and managers have always wanted to do it, even with the SAP portal it wasn’t as user-friendly, it wasn’t as intuitive as it is with the Cloud. So that’s definitely one of the unique selling propositions. And the second item that I said around maintaining and supporting the system. It’s easier to maintain, users have more control over it, they have to rely less on implementation partners, so that helps them make quicker decisions and execute those decisions.

Configuration and the role of IT

22:53 Jon: I would think the UI-based configurations are going to be a pretty attractive feature, right?

22:58 Jyoti: Yes, it is. It is very attractive because we’ve been with customers where they’ve said “we need this additional field and we’re waiting for 5 days for approval from IT so a developer can come and re-labels a field or hides it or makes it visible” and that’s a matter of seconds in Employee Central.

23:19 Luke: It actually raises an important point around IT’s role in governance, which I think we could spend a whole other session talking about. It’s a very valid point that customers can be like “ok, I need to wait for IT approval and then someone has come and do it, they have to do it, then we have to test, and then we have to transport, and then we have to test, and then we have to transport, and then hopefully it works in Production”. This is quite a long period. The whole process can be very quick in Employee Central. “I want a new field”, you just go into the GUI, you add it, it’s there, you test. I mean, the team that actually wants to add the field and does the testing actually adds it, so you’re removing a lot of blockage out of the way. On the other hand, without having the governance and control of, say, IT – who are used to doing that kind of thing – it can be easy for customers to get a bit carried away and start doing things which could be detrimental. So although it has got this strong and powerful capability, organizations need to ensure that they actually manage this sort of thing quite well.

24:53 Jon: So there’s some danger in setting the user free on too much of their own configuration, there’s still some issues that still need a little guidance?

25:01 Luke: You make it that easy and people are more likely to do it. You want them to do it when there’s a good business case and a good reason, but you also want them to do it right when they do it.

Consulting and customer empowerment

30:44 Jon: I like that you laid down the challenge, Jyoti, to consulting firms as well, because to me Luke is spot on that consulting and expertise is still going to be needed, but the model is going to change a lot. I think consulting firms are going to have to rethink this notion of the sort of “milk the cow” dependency of having a ton of consultants’ on-site billing at a consistent rate year over year. It seems to me that customers more and more are going to want a path to autonomy, and the Cloud reinforces that by focusing on business expertise but once that’s transferred then you’re not needed as much. You’re going to be needed for upgrades, and that’s where Luke’s point about the long-term relationship comes in.

32:01 Luke: It’s about empowerment really. It’s about empowering the customer to drive their implementation, because they’re the ones that are going to be managing this system in the long-term. Although they might need support from a partner, they want to be able to do it themselves.

35:04 Jyoti: Unlike SAP, where a customer would see a system only when they get to end-to-end testing or UAT, you are actually seeing the solution as it is being built. That is your opportunity to really validate that “oh, this is how it looks on screen. Ok, I made that decision, maybe that needs to change”, things like that. As you get to iteration 2 and 3, the number of changes should ideally become less if you’ve done a good job upfront of business requirements testing.

Foundation for success

38:27 Jon: I’m going to make a guess that part of the super skill needed here is those early sessions: requirements gatherings, managing expectations around what functionality is available within the system, what might be custom add-ons or extensions, what a customer might need to really give up, like Luke referred to, a process that might not have competitive advantage, it’s better to shift to a standard, what that would take. It sounds to me like a lot of those sessions need to be handled really well.

39:01 Jyoti: Yes, you’re absolutely spot on Jon. If you haven’t done that well then you’re not on the path to success.

47:46 Luke: Customers – particularly those who are used to SAP – often look at HR as if we have core HR, we have talent, we have analytics, we have mobile. Customers need to put it all together and have a more holistic view at Human Capital Management. Customers need to identify what their vision is for HR. What are they actually trying to get out what they are doing? How do they want Human Capital Management to look at the organization? Where do they want to be as an organization, in terms of talent? I think that has a big impact on how you approach the Cloud and I think if customers can build that Cloud strategy and can have that vision in place then they are going to have a really fruitful journey into the Cloud.

48:46 Jon: If you each could pick one other thing that you think SAP should enhance or improve in SuccessFactors; it could the product, it could be the support, the services, whatever it is – what would be the one thing you would like to see from SAP.

49:08 Jyoti: For me, SAP has a very slick transport mechanism when you come to on-premise implementations. You do not have that in SuccessFactors, they are building it out. You do have configuration settings that can be moved from one instance to the other, but I think it’s not where it needs to be. That will really shorten the implementation timelines and will also add a lot of value to the customer experience.

51:07 Jyoti: There are a lot of customers not in the know until they are in the conferences, they see things like what we are doing now. They need some assistance from SAP for partner evaluation. Every partner is out there touting “oh we have certified consultants, we have experience, blah blah blah” but I think that SAP – as an honorous company that they are – owe it to their customers to have some level of influence when customers are doing partner evaluation.