Mr. Wagner, following the acquisition of SuccessFactors, SAP has shifted its focus toward cloud and hybrid models. This also applies to HR. What are SAP’s plans?
Ralf Wagner: Just to outline the background, we are currently monitoring three key trends relevant to HR managers worldwide. First is the battle for talent. Second is the mindset of the latest generation of employees, who have completely different expectations regarding the IT of their employer. And the third trend is the growing data volumes, even in HR. We have customers who tell us they would be happy if they even knew how many employees they have worldwide.
How can a company not know that?
It can happen as a result of acquisitions, disposals, or mergers, which can often lead to a very heterogeneous HR IT landscape. One consequence of this is that some companies don’t actually know the exact number of people they employ. Payroll, for example, is a key data source, but is often outsourced. As such, when a company acquires a new company, which itself outsources its payroll affairs to one or multiple service providers, the HR manager can often lose track of the figures.
What does SAP offer, and what role does SuccessFactors play?
The cloud solutions from SuccessFactors and the on-premise solutions from SAP complement each other very well for our customer base. Traditionally, SAP has been a company offering solutions in classic areas such as HR administration. At SuccessFactors, the focus is more on communication between managers and employees, knowledge management, and similar areas. The market wants a combination of the two, and increasingly, a complete cloud-based HR solution.
In this case, who is “the market”?
I’m talking about customers such as Siemens. We know from various meetings that customers want this combination. We have come across the following situations: Many companies employ a hybrid model in which they retain their core HR on-premise solution, but procure talent functions from the cloud. It is also increasingly common for the head office to work with an on-premise application while the smaller branch offices access full cloud-based solutions. Other companies are moving away from old, outdated HR systems, and are making a new start in the cloud. Essentially, all roads now lead to the cloud, and it is our job to help companies maintain their momentum.
At SAP, we have undergone a paradigm shift. In the past, everything was about functions and functionality. Now, however, it is all about usability for end-users. When it comes to our HR solutions, we have to ask ourselves: Which type of hybrid model does the customer employ? What type of end-to-end processes are there? Where do we need to offer greater integration?
How would you describe your road map?
With Employee Central, SuccessFactors offers a core HR system from the cloud. Not only is it a data system, but it also generates added value by linking into existing talent management functions, and offers strong analyses and collaboration. The solution is currently used by around 100 customers, and demand is growing all the time. US market researcher Gartner estimated that by 2015, some 70% of new HCM applications will be cloud-based. Employee Central already offers an advanced level of development. In the area of talent management, the BizX Suite from SuccessFactors is our “go-forward strategy”, and innovations are realized in the cloud. With regard to our on-premise solutions, the existing palette has seen individual refinements, and we guarantee our customers will be able to use our solutions until 2020 – such as the entire BusinessSuite.
How many releases are you planning?
There will be four releases a year. This also applies to the full Suite.
What is the state of play in terms of moving the SuccessFactors cloud applications to the SAP HANA platform?
Many of the applications have already been ported over. The HR Cloud Analytics solution, for example, has been “powered by HANA” for some time now. When it comes to cloud-based solutions, however, many decision-makers are no longer as interested in the underlying database technology.
Are they turning more to their CIOs or Chief HR Officers?
It all depends on the role of the respective decision-maker, and on the role HR plays within the organization. For example, if a company follows an aggressive growth strategy, it can quickly acquire other companies or sell them off again. In this case, the HR business and IT teams need to be able to support these processes. Or take payroll, for instance: These services are often outsourced, but some of our customers tell us that branch offices with several hundred employees should insource payroll again. Ultimately, this helps maintain cost transparency, and helps with planning. The key question is what a company wants to achieve with its HR and supporting IT infrastructure.
What analytical options are there for executives?
Analytical tools that provide managers with KPIs based on best practices are available both for on-premise and cloud solutions. Our cloud offerings also offer highly anonymized benchmarking data. This allows customers, for example, to research questions such as: What will a new hire cost me in relation to my competitors? How do my turnover rates compare with the rest of the industry?
Are there any compliance considerations for the different regions?
One of the strengths of SAP’s on-premise solutions is that we deliver country‑specific versions containing features such as updated tax legislation, normally once a year. We are now transferring this service to the cloud. There are currently eleven country versions, and by the end of the year we expect this number to rise to 52 – as many versions as are available in the on-premise segment.
Another consideration is the graphical user interface – the SAP GUI. What are your plans here?
We have made a lot of progress when it comes to modernization in this area. It brings me back to the paradigm change I mentioned earlier: Working under the new concept of “Design Thinking”, we are addressing the experiences and needs of SAP HCM end users more, and increasingly focusing on usability. The result is a landing page where HR officers can quickly find everything they need for their day-to-day work.
How can users customize this page?
We have introduced side-by-side “lanes” that run from top to bottom of the screen. One of these lanes shows tasks that need to be completed that day, while other lanes show discussions, organizational tasks, and so on. Each user can arrange the lanes to suit their own preferences. Clicking on a lane opens it out as an “expanded lane” showing additional functions. The overall title for this concept is the HR Renewal Project. It is partly programmed in HTML5, and looks amazing! (laughs) We delivered the first package last August to a target group of expert HR users.
What else is planned in the HR Renewal Project?
Two additional packages, or “Feature Packs”, are now available, with another to follow in July. Following the completion of “HR Renewal 1.0”, we are now planning Version 2. This time, we are not only approaching expert users, but also casual users from management segments.
What the technical requirements?
The customer must have Enhancement Package 6 for HR Renewal 1.0. Depending on the required functionality, Feature Packs 1, 2, and 3 must be installed.