Introduction to
Human Capital Management VERSION I
Kathleen Utecht (Sam Houston State University); Kristof Schneider, Alex
McLeod Jr. (SAP SE); Ross Hightower (UCC Milwaukee)
August 2014
Introduction to Human Capital Management
AGENDA
MOTIVATION FOR HUMAN CAPITAL MANAGEMENT – BUSINESS RELEVANCE
CHALLENGES FOR COMPANIES
CHANCES AND BENEFITS FOR COMPANIES
INTRODUCING SUCCESSFACTORS AS EXAMPLE FOR HUMAN CAPITAL MANAGEMENT
SOLUTION
INTEGRATION OF SUCCESSFACTORS WITH EXISTING SAP SOLUTIONS (E.G., BUSINESS SUITE)
CANNED DEMOS SUCCESSFACTORS
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Introduction to Human Capital Management
AGENDA
MOTIVATION FOR HUMAN CAPITAL MANAGEMENT – BUSINESS RELEVANCE
CHALLENGES FOR COMPANIES
CHANCES AND BENEFITS FOR COMPANIES
INTRODUCING SUCCESSFACTORS AS EXAMPLE FOR HUMAN CAPITAL MANAGEMENT
SOLUTION
INTEGRATION OF SUCCESSFACTORS WITH EXISTING SAP SOLUTIONS (E.G., BUSINESS SUITE)
CANNED DEMOS SUCCESSFACTORS
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Introduction to Human Capital Management
MOTIVATION
MOTIVATION
FOR HUMAN CAPITAL MANAGEMENT
– BUSINESS
RELEVANCE
 Companies strive to gain the competitive advantage,
and maintain a high-performance work organization
 Primary differentiators in high performance are human
resources
 Companies can sustain the competitive advantage
by championing human resource talents and
competencies
 Talents and competencies are reflected in human
capital, i.e., knowledge, skills, abilities, and other
characteristics (KSAOs)
 To increase effectiveness and create value, businesses
need to invest in its human capital, and manage its
talent from employee entry to exit
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Introduction to Human Capital Management
MOTIVATION CONT’D.
MOTIVATION
FOR HUMAN CAPITAL MANAGEMENT
– BUSINESS
RELEVANCE
 Human capital management (HCM) centers on the
following framework: Antecedents/Investments (A/I)
Human CapitalConsequences/Benefits (C/B)
 A/I influence human capital
 C/B result from human capital
 Antecedents and Consequences are derived from the
employee‘s perspective, while Investments and Benefits
reflect the employer level of analysis, e.g.,
 A/I: education and experience/selection and
training
 C/B: job performance and promotion/earnings and
market share
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Introduction to Human Capital Management
MOTIVATION CONT’D.
MOTIVATION
FOR HUMAN CAPITAL MANAGEMENT
– BUSINESS
RELEVANCE
 Strategic human capital management requires
investment in human capital which creates value to a
company in a differentiating way, thereby producing
economic value
 Strategically managing human capital can lead to a
higher rate of return, as reflected in the following:
 Return on investment (ROI)
 Return on assets (ROA)
 Sustaining the competitive advantage
 Maintaining a high-performance work organization
through exceptional human capital performance
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Introduction to Human Capital Management
AGENDA
MOTIVATION FOR HUMAN CAPITAL MANAGEMENT – BUSINESS RELEVANCE
CHALLENGES FOR COMPANIES
CHANCES AND BENEFITS FOR COMPANIES
INTRODUCING SUCCESSFACTORS AS EXAMPLE FOR HUMAN CAPITAL MANAGEMENT
SOLUTION
INTEGRATION OF SUCCESSFACTORS WITH EXISTING SAP SOLUTIONS (E.G., BUSINESS SUITE)
CANNED DEMOS SUCCESSFACTORS
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Introduction to Human Capital Management
CHALLENGES
CHALLENGES
FOR COMPANIES
 Continual improvements in human capital management
(HCM) create challenges for today‘s evolving companies
 Businesses need to demonstrate how effective HCM
positively influences the bottom line
 This requires companies to draw on evidenced-based
HCM, i.e., verifiable measures of the impact
 However, measurement is problematic, i.e., examining
simple metrics may provide information on human
capital efficiency, but little regarding the effectiveness of
human capital processes and practices, e.g.,
 Market value linked to human capital
 FTE as a KPI of human capital productivity
 Training budget ratio per employee
 Revenue or profit per employee
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Introduction to Human Capital Management
CHALLENGES CONT’D.
CHALLENGES
FOR COMPANIES
 A more sophisticated, economic approach to
measurement involves the use of HR analytics, i.e.,
examining the financial costs and benefits of particular
HCM processes, e.g.,
 Enhanced productivity associated with better
selection efforts
 Reduced employee turnover linked to improved
employee development programs
 Enriched employee engagement correlated with
continual learning and training opportunities
 Systemic issues in measurement reporting also prevail
 Using a more theoretical landscape to determine how
human capital relates to organizational value would
have merit
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Introduction to Human Capital Management
CHALLENGES CONT’D.
CHALLENGES
FOR COMPANIES
 Changing composition of the workforce will present
challenges with respect to gender and generational
differences, as well as to the growth of contingent labor
in the workforce
 To address employee engagement and retention,
managers need to recognize employee efforts, guide
career development, offer opportunities for
advancement, and build leadership potential
 Cultivating a culture of camaraderie, ownership, and
loyalty to a business is essential so employees feel
they are key performers in the sucess of the company
 Companies will have to be responsive to
the diverse needs of its 21st century workforce through
effective human capital management and process
improvement
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Introduction to Human Capital Management
AGENDA
MOTIVATION FOR HUMAN CAPITAL MANAGEMENT – BUSINESS RELEVANCE
CHALLENGES FOR COMPANIES
CHANCES AND BENEFITS FOR COMPANIES
INTRODUCING SUCCESSFACTORS AS EXAMPLE FOR A HUMAN CAPITAL MANAGEMENT
SOLUTION
INTEGRATION OF SUCCESSFACTORS WITH EXISTING SAP SOLUTIONS (E.G., BUSINESS SUITE)
CANNED DEMOS SUCCESSFACTORS
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Introduction to Human Capital Management
BENEFITS
CHANCES AND
BENEFITS FOR COMPANIES
 The challenges of managing talent convert into
opportunities for improving HCM and its processes
 Through proper alignment of human resources with
strategy, human capital value can be created and
demonstrated
 Capitalizing on this opportunity, managers can create a
culture where employees are transformed into valuable
assets which drive business performance
 Optimizing the workforce provides a chance for
managers to monitor each stage in the employment
lifecycle
 Consistent monitoring produces employees who are
flexible, nimble, responsive to change, and willingly
engaged performers
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Introduction to Human Capital Management
BENEFITS CONT’D.
CHANCES AND
BENEFITS FOR COMPANIES
 As a consequence, a human capital pipeline is
guaranteed to ensure a company gets and keeps the
competitive edge
 Maximizing employee potential in the pipeline can be
accomplished through the following HCM processes:
 Acquiring, engaging, and retaining the best talent
 Developing skills essential for exceptional job
performance
 Promoting learning agility, goal-setting, and career
development
 Creating opportunities for leadership
 Providing a total reward system that includes both
cash compensation and relational returns
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Introduction to Human Capital Management
BENEFITS CONT’D.
CHANCES AND
BENEFITS FOR COMPANIES
 As in so many areas of process improvement and
control, technology is leveraged as part of the solution
for measuring the value of human capital and managing
the workforce of the future
 Companies advocate the use of cloud-based technology
which enables the sharing of human capital data and
facilitates the management of the employment journey
from recruitment to retirement
 Cloud-based software promotes the management of
human capital through core processes such as
workforce planning, recruitment and selection, training
and development, performance management, and
compensation: all hallmarks of effective
HCM and high-performance work organizations
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Introduction to Human Capital Management
AGENDA
MOTIVATION FOR HUMAN CAPITAL MANAGEMENT – BUSINESS RELEVANCE
CHALLENGES FOR COMPANIES
CHANCES AND BENEFITS FOR COMPANIES
INTRODUCING SUCCESSFACTORS AS EXAMPLE FOR HUMAN CAPITAL MANAGEMENT
SOLUTION
INTEGRATION OF SUCCESSFACTORS WITH EXISTING SAP SOLUTIONS (E.G., BUSINESS SUITE)
CANNED DEMOS SUCCESSFACTORS
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Introduction to Human Capital Management
INTRODUCING SUCCESSFACTORS
INTRODUCING SUCCESSFACTORS AS EXAMPLE FOR AN HCM SOLUTION
 SuccessFactors is the leader in the 2014 Gartner Magic
Quadrant for Talent Management Suites.
 The most complete Talent Management Suite, the complete
‘Recruit to Retire’ cycle is covered.
 SuccessFactors contains the following components:
 Employee Central
 Performance & Goals
 Workforce Planning
 Recruiting Execution
 Onboarding
 Compensation Management
 Learning Management
 Succession & Development
 Social Collaboration (SAP Jam)
 Workforce Analytics
 There is a strong focus on mobile capabilities.
 It is 20 million+ subscribers and 3,600+ customers strong.
 It is used by companies of all sizes, including very big ones
such as Procter & Gamble, Coca-Cola, and Adidas.
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Introduction to Human Capital Management
INTRODUCING SUCCESSFACTORS
SUCCESSFACTORS – EMPLOYEE CENTRAL
 RELEVANCE
The relevance of core HR is moving and driving people
decisions that grow the business.
 SuccessFactors’ Employee Central supports a broad range of
HR processes and transactions, e.g., new hires and
onboarding, changes and transfers, or position and absence
management
 Employee Central provides global processes and local best
practices for worldwide standardization on a single database
 It is available in 185+ countries (51 localized), and 33
languages
 It is completely adaptable and extensible to a company’s
changing business needs
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Introduction to Human Capital Management
INTRODUCING SUCCESSFACTORS
SUCCESSFACTORS – PERFORMANCE & GOALS
 RELEVANCE
It is important that the employees understand the company
strategy and goals, and know how they individually contribute
to their achievement.
Performance management practices have the biggest impact
on employee productivity of any talent process.*
 SuccessFactors’ Performance and Goals supports the
following:
 Clarifying and increasing organizational alignment
through cascading goals, from executive management
to every employee
 Increasing accuracy and relevance of formal reviews
through writing and coaching assistants with legal
check, through calibration, and 360 reviews
 Delivering continuous coaching and development
through team rater for quick team and individual review
* Harvard Business Review
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Introduction to Human Capital Management
INTRODUCING SUCCESSFACTORS
SUCCESSFACTORS – WORKFORCE PLANNING & ANALYTICS
 RELEVANCE
Talent shortages are a key threat to business success, so the
measurement of talent management effectiveness is a
challenge.
 SuccessFactors’ Workforce Planning and Analytics provides the
following:
 Workforce planning capabilities that deliver insight into
critical workforce demands, on critical talent gaps and how
to fill those gaps, and that quantify the financial
implications of strategic workforce planning decisions
 Analytical capabilities that deliver concrete and actionable
insight into workforce data, e.g., metrics and benchmarks
or talent flow analytics
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Introduction to Human Capital Management
INTRODUCING SUCCESSFACTORS
SUCCESSFACTORS – RECRUITING EXECUTION
 RELEVANCE
Finding skilled talent across the globe has never been more
difficult that it is today and the role of the recruiter has changed
significantly.
Recruiting is at least $1 billion of the $10 billion human capital
software market.
 SuccessFactors’ Recruiting Execution supports the following:
 The entire recruiting cycle “Attract to Onboard,” i.e.,
 Attract
 Attract talent directly to the company
 Engage  Engage and capture talent, inside and out
 Select
 Select the best, faster and easier
 The measurement of the entire recruiting cycle to
identify “what worked”
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Introduction to Human Capital Management
INTRODUCING SUCCESSFACTORS
SUCCESSFACTORS – ONBOARDING
 RELEVANCE
Onboarding is one of the most underdeveloped areas of talent
management today.*
Research shows that effective new employee onboarding leads to
lower stress, higher job satisfaction, higher performance levels,
career effectiveness, organizational commitment, and lower
turnover.**
 SuccessFactors’ Onboarding delivers a complete set of
tools that provide the following:
 GUIDE a new employee through the onboarding process
which increases process efficiency, reduces legal risk due
to higher compliance, as well as cuts costs for paperwork
and processing.
 CONNECT a new employee with a team which improves
employee engagement and employee retention.
 DEVELOP a new employee to archive faster time for
employee contribution, align the new hire to corporate
goals, and promote enhanced employee satisfaction.
* AberdeenGroup, ** Talya N. Bauer
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Introduction to Human Capital Management
INTRODUCING SUCCESSFACTORS
SUCCESSFACTORS – COMPENSATION MANAGEMENT
 RELEVANCE
The ability to make objective performance, pay, and promotion
decisions is a requirement to motivate and retain key employees.
 SuccessFactors’ Compensation Management provides the
following:
 Support for multiple compensation components, including
salary, bonus, and equity awards
 Validation checks and reports on data and calculations at
each step that allow administrators to detect and correct
discrepancies.
 Rating views and pay distributions in bin and grid views,
and capability to visually compare employees
 Easy-to-read graphs, views, and filters to make sense of
calibration goals and status
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Introduction to Human Capital Management
INTRODUCING SUCCESSFACTORS
SUCCESSFACTORS – LEARNING MANAGEMENT
 RELEVANCE
Learning is the path to improving business results and
execution.
It addresses key concerns such as productivity, globalization,
competitiveness, growth and compliance, and it is impacted by
key events such as product launches, acquisitions, and
restructuring.
 SuccessFactors’ Learning Management provides the following:
 An entire Learning Management System (LMS) that
allows an organization to deploy a comprehensive
learning strategy that includes instructor-led training
(ILT), eLearning, virtual learning, exams, certifications,
and extended learning
 Learning analytics to identify the real impact of learning
programs
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Introduction to Human Capital Management
INTRODUCING SUCCESSFACTORS
SUCCESSFACTORS – SUCCESSION & DEVELOPMENT
 RELEVANCE
Companies with best-practice succession management programs
are three times more effective at achieving key business
measures.*
 SuccessFactors’ Succession and Talent Management supports
the following:
 Succession Org Chart – A dynamic, easy to read visual
summary of existing and potential gaps
 Talent Search – Search for employees based on
background information such as education or work history,
as well as competency ratings to identify qualified
successors
 Side-by-Side Comparison – Easy candidate comparison
by dimensions such as education, experience, and more
 Career Development Plans – Identify the competency
gaps in talent, and build actionable development plans
that balance the needs of the company with individual
career goals
* Bersin & Associates
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Introduction to Human Capital Management
INTRODUCING SUCCESSFACTORS
SUCCESSFACTORS – SOCIAL COLLABORATION (SAP JAM)
 RELEVANCE
Social collaboration helps to engage new employees and
reduce time to onboard.
In addition, it helps to share best practices, streamline
communications, mentor, and grow talent.
 SuccessFactors’ JAM provides several types of social
collaboration, including the following:
 Social networking, collaboration with external participants
(customers, recruits, partners, vendors, suppliers)
 Structured collaboration for problem solving (business tools
to strategize and rank items, enabling groups to weigh in
on options, etc.)
 Business process integration
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Introduction to Human Capital Management – PROPOSAL
AGENDA
MOTIVATION FOR HUMAN CAPITAL MANAGEMENT – BUSINESS RELEVANCE
CHALLENGES FOR COMPANIES
CHANCES AND BENEFITS FOR COMPANIES
INTRODUCING SUCCESSFACTORS AS EXAMPLE FOR HUMAN CAPITAL MANAGEMENT
SOLUTION
INTEGRATION OF SUCCESSFACTORS WITH EXISTING SAP SOLUTIONS (E.G., BUSINESS SUITE)
CANNED DEMOS SUCCESSFACTORS
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Introduction to Human Capital Management
INTEGRATION
WITH EXISTING
SAP SOLUTIONS
INTEGRATION
OF
SUCCESSFACTORS
WITH
SAP ERP
 RELEVANCE
To protect the investment of a company, it is important to offer
different options on how to integrate SuccessFactors with the
installed SAP ERP solution.
 There are three different models on how to integrate
SuccessFactors with SAP ERP, as follows:
 The Talent Hybrid deployment model is for customers
who want to run talent solutions (e.g., Compensation or
Performance & Goals) in the cloud while keeping employee
administration on-premise
 The Side by Side HCM deployment model is for
customers who want to transition their Core HR system
while still leveraging investments in employee administration on-premise
 The Full Cloud HCM deployment model is for customers
who want to run all people management applications in the
cloud
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Introduction to Human Capital Management
AGENDA
MOTIVATION FOR HUMAN CAPITAL MANAGEMENT – BUSINESS RELEVANCE
CHALLENGES FOR COMPANIES
CHANCES AND BENEFITS FOR COMPANIES
INTRODUCING SUCCESSFACTORS AS EXAMPLE FOR HUMAN CAPITAL MANAGEMENT
SOLUTION
INTEGRATION OF SUCCESSFACTORS WITH EXISTING SAP SOLUTIONS (E.G., BUSINESS SUITE)
CANNED DEMOS SUCCESSFACTORS
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Introduction to Human Capital Management
CANNED DEMOS
CANNED
Click to start
Demo#4
Click to start
Demo#1
DEMOS
SUCCESSFACTORS
•
Demo #1 –
Performance & Goals
•
Demo #2 –
Recruiting Execution
•
Demo #3 –
Workforce Planning & Analytics
•
Demo#4 –
Onboarding
•
Demo #5 –
Learning Management
•
Demo #6 –
Succession & Development
•
Demo #7 –
Integration with SAP ERP On Premise - Cost
Center Integration
Click to start
Demo#5
Click to start
Demo#2
Click to start
Demo#3
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Click to start
Demo#6
Click to start
Demo#7
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Introduction to
Human Capital Management VERSION I
Kathleen Utecht (Sam Houston State University); Kristof Schneider, Alex
McLeod Jr. (SAP SE); Ross Hightower (UCC Milwaukee)
August 2014
© 2014 SAP SE or an SAP affiliate company.
All rights reserved.
No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE or an
SAP affiliate company.
SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE
(or an SAP affiliate company) in Germany and other countries. Please see http://global12.sap.com/corporate-en/legal/copyright/index.epx for additional
trademark information and notices.
Some software products marketed by SAP SE and its distributors contain proprietary software components of other software vendors.
National product specifications may vary.
These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind,
and SAP SE or its affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP SE or
SAP affiliate company products and services are those that are set forth in the express warranty statements accompanying such products and
services, if any. Nothing herein should be construed as constituting an additional warranty.
In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related
presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation, and SAP SE’s or its affiliated
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that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking
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