Successfactors HCM
MiNdLiNkS Training Material
MINDLINKS R&D IT LABS, 4TH FLOOR, ADITYA ENCLAVE, AMEERPET, HYDERABD
January 1, 2014
Authored by: Praveen Reddy
Successfactorshcm.com
Successfactors : An Overview
SaaS and Successfactors:
KEY CONCEPT
Software-as-a-Service (SaaS), also known as On-Demand, is the next generation of enterprise software
offered as services in the cloud. SaaS provides access to enterprise software on a subscription basis
without the need to own or maintain hardware or software. The software, and your data, is hosted
remotely and accessed on demand from any location using the unique login credentials of your
organization. SaaS software is multi-tenant, which means that many instances of the software are
accessed and are on the same application version. Users can choose which features and functionality to
use in the standard solution and in the regular releases that are introduced by the vendor. Cloud, in this
context, refers to any software or service that is hosted remotely and accessed over the Internet.
On February 23, 2012, SAP acquired the Software-as-a-Service (SaaS) HCM and Talent Management
software vendor SuccessFactors for $3.4 billion. This acquisition turned SAP into a vendor of both onpremise and SaaS HCM software and a major player in the competitive SaaS HCM market. It also
brought the experience and expertise of SuccessFactors founder Lars Dalgaard onto the SAP Executive
Board, to bring what was termed “Cloud DNA” into the organization.
SaaS is considered to be the next-generation platform for providing enterprise software. While many
people feel uncomfortable with the concept of cloud computing, they may not understand that they are
already using cloud-based software for everyday activities, such as email (e.g., Hotmail and Gmail) or
document storage (e.g., Google Drive and Dropbox). Almost any piece of software offering a service over
the Internet is SaaS and these offerings are now touching our daily lives.
The next step for SaaS is enterprise software. Originally many of the SaaS vendors started with talent
management systems, following the growing trend seen in the 1990s and 2000s. As many of the vendors
grew, they began to expand their portfolios and offer other HCM services. Now, SaaS vendors are also
pioneers of social collaboration software for businesses and mobile solutions. SuccessFactors is
considered a leader in SaaS talent management and social collaboration software and was recently
named as a leader in Talent Management by IDC. In Gartner’s 2011 Employee Performance
Management Magic Quadrant, which covers performance management, succession planning, and
compensation management capabilities, SuccessFactors came out head and shoulders above all other
vendors; unsurprisingly, many of the closest challengers were SaaS vendors.
One of the key strengths of SaaS software is its Web-orientated user interfaces. The evolution of Web 2.0
has enabled applications with rich features and user interfaces to run over the Internet, which was not
possible before. For more information on SaaS and its pros and cons, see the sidebar, “Why SaaS?”
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Why SaaS?
SaaS software is not just software accessed via the cloud; it is a new
model of delivery. SaaS offers a number of features not available in
on-premise software, such as:
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No hardware or maintenance required
Subscription-based licensing model
Multi-tenant platform
Regular releases, updates, and enhancements
Access from anywhere
Since the software is accessed from the cloud, there is no need to
host any software and thus hardware is not required. Consequently
there are no systems to maintain and users can reduce their IT
overhead and costs significantly. This also means that users can
access the software via a URL with most Web browsers from any
location that has an Internet connection. The subscription model
means that customers only pay for exactly what they use (i.e., per
user), on a yearly basis. This means no large capital expenditure up
front for perpetual licenses and, in addition, subscription-based
licenses can be classified as an operational expense.
From a financial or accounting perspective, there can be many
reasons why an organization might not want to have large capital
expenditures or own and maintain assets that are not directly related
to their core business. This type of licensing also makes managing
expenditure much easier, since the upgrade, maintenance, and
support costs are fixed in the subscription fee for an agreed period of
time. On the other hand, some companies may not be able to justify
the expenditure on enterprise software that they cannot put on their
balance sheet as a fixed asset.
SaaS software is multi-tenant, meaning that all customers use the
same instance of the software. Each licensee has its own tenant (set
of configuration) running on the instance. This means that new
releases and updates can be applied to the instance and all tenants
have access to the enhancements or bug fixes introduced. Secondly,
it means that customer systems are stable and each new
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implementation can benefit from beginning with a stable system. Quite
often many new SAP implementations face a number of product
issues that must be resolved throughout the project and often
afterwards. When a project begins on an earlier Service Package or
Enhancement Package version that is available, many of the issues
faced are already known and fixes are available that must be applied
and tested. In the case of SaaS, this is not as common an occurrence
since the system is always the latest version and it is kept current. In
the case of SuccessFactors Workforce Analytics, for example, it
means that the software can offer analytics benchmarks based on the
aggregation of the data in each tenant. This functionality cannot be
provided with on-premise software.
SaaS software is considered to be more standard or a best-practice
solution and has fewer customization possibilities. This provides
frequent releases and updates without causing disruption, so
customers can add new functionality regularly, but it also means less
flexibility in meeting complex customer requirements. On the other
hand, it means that customers can avoid having heavily (and
sometimes poorly) customized systems that require greater effort to
maintain and modify or enhance.
Data is stored in a remote location, which legislation in some countries
specifies must be stored within that territory. Legislation within some
countries has other facets that might act as a barrier to adoption. For
example, data held in Swedish-based data centers is subject to
legislation that allows the government to access this data without a
court order. Safe Harbor between the US and the European Union
means that US companies should address EU members’ data privacy
laws, although there is no validation of this program to ensure that it is
being operated correctly. There are also rumors and inaccuracies that
have been circulated about some laws, such as the USA PATRIOT
Act giving federal security agencies within the US the right to access
data stored in data centers of US companies without a valid court
order or subpoena, which is untrue. While there is a shortage of global
cloud regulations, it is inevitable that harmonized standards and
regulations will be introduced in the future. Cloud and SaaS are still in
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their infancy and so it takes time for the foundations for global
cooperation to be realized.
Since SaaS software is, in effect, rented, then ending an agreement
may have implications over how data is, if at all, returned. Some
agreements state that data is simply provided in a spreadsheet,
without providing any proprietary information around format, medium,
or time frame. Organizations should carefully review the terms and
conditions for cancelling subscription-based contracts prior to signing
any agreements.
Who Is SuccessFactors?
Prior to the acquisition, SuccessFactors was a vendor of SaaS “business execution” (BizX) software for
the Human Capital Management (HCM) market. SuccessFactors was formed in 2001, by Lars Dalgaard
and Aaron Au, and is based in South San Francisco, CA. The company has offices in more than 35
locations worldwide, including several countries in South America, Europe, and Asia–Pacific. It went
public in November 2007 on the NASDAQ stock market, under SFSF, but in 2011 moved from NASDAQ
to become the first company ever to be triple-listed on the New York Stock Exchange, Euronext Paris,
and Frankfurt Stock Exchange.
Its business is focused around providing SaaS software services covering core HR, workforce planning,
talent management, social collaboration, and analytics. Talent management, social collaboration, and
analytics are particular strengths of SuccessFactors. Social collaboration underpins a lot of the processes
in the SuccessFactors HCM suite, while its vendor-agnostic analytics solution provides more than 1,500
out-of-the-box analytics that cover all solutions. Its talent management suite comprises solutions for all
the major process areas: recruiting, performance, goal management, compensation learning, succession
planning, and development.
SuccessFactors has more than 3,500 customers in 168 territories using 35 different languages. This large
customer base provides it with 15 million subscriptions and with revenues of $364 million (in 2011).
SuccessFactors has many recognized companies within itscustomer list, including 20th Century-Fox,
Adobe, Allstate, American Airlines, Astra Zeneca, the Department of Homeland Security, NASA, PepsiCo,
Siemens, Sobeys, Starbucks, and Walmart.
Originally SuccessFactors focused on performance management software, but in 2009 the company
expanded its strategy to offer what it called “business execution” software. SuccessFactors launched the
business execution suite – originally known as the BizX suite and now called the HCM suite – to extend
its reach from measuring employee performance and goal setting to supporting companies in executing
business strategy. By expanding its portfolio to full HCM, SuccessFactors was aiming to double its market
potential.
SuccessFactors also focuses on its ability to provide business execution, reduce the total cost of
ownership (TCO), and use return on execution (ROX) to evaluate the success of projects (as opposed to
the standard measurement indicator, return on investment [ROI]). ROX, in its simplest form, can be
calculated with the formula:
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Net gain from improved execution / Net execution investment = Return on execution (ROX)
ROX is meant to ensure that organizations benefit more than just financially. In the report Return on
Execution by Erik Berggren, director of customer results & global research, and Lars Dalgaard, CEO, it
was suggested by SuccessFactors that “bottom line results are far more dependent on execution (85%
vs. 15%) than on strategic plans.”
SuccessFactors helps its HCM suite execute strategy through three main focus areas:
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Attract and retain
Align and execute
Develop and learn
Different process areas feature in each of these areas and SuccessFactors HCM suite covers these
process areas (Table 1):
Table 1
Process areas for SuccessFactors HCM suite
These are all supported by social collaboration, core HR, workforce planning, and workforce analytics.
Growth by Acquisition
During its history, SuccessFactors has made a number of acquisitions to strengthen its existing portfolio.
It has acquired six companies for more than $400 million:
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Inform Business Impact
Cubetree
YouCalc
Jambok
Plateau Systems
Jobs2Web
Each of these acquisitions brought in applications that are now core parts of the SuccessFactors
offerings.
Inform Business Impact (previously called Infohrm) was a $40.5 million acquisition made in 2010, and
was the first purchase made by SuccessFactors. Inform Business Impact was a leading provider of
analytics software and its assets formed the basis of the SuccessFactors Workforce Analytics solution. A
few months later SuccessFactors purchased Cubetree for $50 million. Cubetree produced a cloud
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enterprise social collaboration and networking platform of the same name that eventually became the
SAP Jam solution. The last acquisition of 2010 saw SuccessFactors purchase YouCalc for an
undisclosed figure. This acquisition meant that SuccessFactors was able to offer real-time data analysis
and calculation in the cloud – a first for any SaaS vendor.
In 2011, SuccessFactors also made three more acquisitions, with the final acquisition made after the
announcement of its deal with SAP. First, in March 2011, SuccessFactors completed a deal to buy
Jambok, a provider of a social learning platform focused around content creation and sharing, for an
undisclosed sum. Shortly after this acquisition, SuccessFactors purchased Plateau Systems, which at the
time was a leading learning management system vendor, for $290 million. Finally, in December 2011,
SuccessFactors completed an acquisition of Jobs2Web for $110 million. This deal was announced after
SAP had signaled its intention to buy SuccessFactors, although SAP indicated that it was
SuccessFactors’ prerogative to make acquisitions while it was still an independent company. Jobs2Web
provided application-tracking and social networking integration software, which formed the foundation for
SuccessFactors’ Recruiting Marketing solution.
Following these series of strategic acquisitions, SuccessFactors was able to offer a full suite of HCM
solutions in the cloud, including comprehensive core HR, end-to-end talent management, social
collaboration, and analytics.
The SuccessFactors HCM Suite
SuccessFactors offers an HCM suite in the cloud, covering all major processes areas. The suite is very
strong in talent management, social collaboration, and analytics, and although its core HCM solution,
Employee Central, is not yet as mature as SAP HCM, it has grown rapidly since the acquisition has
closed. Social, mobile, and analytics underpin a lot of the product functionality across the suite. In the
short term, SAP hopes to migrate both Workforce Planning and Workforce Analytics onto SAP HANA for
increased speed and processing capabilities, with the rest of the suite also being powered by SAP HANA
by the end of 2013. The graphic in Figure 1shows the application processes in the suite.
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Figure 1
The SuccessFactors HCM suite
The SuccessFactors HCM suite contains the following applications:
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Employee Central – The core HCM system
Performance and Goals – Performance and goal management
Recruiting – Recruiting management and marketing
Compensation – Employee compensation planning
Learning – Learning management system for training and learning activities
Succession and Development – Succession planning and employee development
Onboarding – Employee onboarding solution for pre and new hires
SAP Jam – Social collaboration and networking platform
Workforce Analytics – Comprehensive analytics and reporting
Workforce Planning – Workforce planning and resource allocation
BizX Mobile – Mobile application to perform processes on the go
Employee Central is the next generation core HCM system that covers functionality such as personnel
management, organizational management, and time off. The company’s organizational chart is a key
component of the system, which differs from the traditional SAP system. SAP’s hosted payroll solution,
Employee Central Payroll, is an optional component of Employee Central. As you might expect, it is fully
integrated with all the HCM suite solutions and underpins the rest of the suite as a central platform for
managing employees, positions, organizational, and salary data across multiple geographies, companies,
and reporting areas. Employee Central has grown significantly since the acquisition by SAP and is now
(as of September 2013) being implemented by global organizations such as PepsiCo and Timken.
Thomas Otter, a leading industry analyst, has been appointed as Vice President, Product Management,
for Employee Central, and he is experienced in both traditional and cloud-based core HR.
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SuccessFactors’ range of talent management solutions – Performance and Goals, Recruiting,
Onboarding, Compensation, Learning, and Succession and Development – provide end-to-end talent
management that is integrated with the other HCM suite applications. These applications are the focus of
SAP’s hybrid strategy, which is when SAP customers use SAP HCM on premise for core HR and
SuccessFactors HCM suite for talent management processes.
SAP Jam – formerly known as SuccessFactors Jam and offered as part of the SuccessFactors HCM suite
– is a social collaboration platform designed to enhance communication and sharing, onboarding of new
employees, and collaboration across an organization. It incorporates social-media functionalities that
Twitter, Facebook, and Google Plus users will find familiar. SAP Jam provides users with the opportunity
to upload documents, create videos, create Wikis, create groups, and automate group membership for
individuals based on certain attributes. SAP Jam is not an HR-specific solution and can be used in a
variety of functions across an organization, such as sales or finance.
Workforce Analytics offers a wide-ranging collection of analytics and reports that covers all processes and
HCM suite applications. Workforce Analytics’ benchmarking analytics take all the data from all customer
instances to create comparable benchmarks that organizations can use for comparison with their own
performance. Predictive analytics are also cutting-edge functionality offered within Workforce analytics.
Headlines is a new mobile application available for smartphone and tablet devices that provides
managers with relevant and targeted analytics for their area of responsibility in real time.
Workforce Planning builds on analytical data to provide customers with the ability to identify current and
projected workforce needs, as well as the skills and competencies to support the long-term needs of an
organization. In addition it also features “what-if” modeling capabilities to identify the financial impact of
different workforce scenarios and predictive workforce planning functionality to forecast company growth,
costs, and skills gaps based on current and previous data.
BizX Mobile provides employees throughout an organization with the ability to perform a number of
activities from their smartphones or tablet devices. BizX Mobile supports iPhone, iPad, Blackberry, and
Android devices and provides functionality to view notifications, display the organizational chart, manage
recruiting requisitions, manage learning activities, and perform SAP Jam actions. Although part of the
HCM suite, BizX Mobile is not a solution in its own right but a complementary solution that supports all the
solutions in the suite.
The Acquisition by SAP
On December 3, 2011, SAP announced that it had entered into an agreement to purchase the entire
stock of SuccessFactors for $3.4 billion via its subsidiary SAP America, Inc. The news sparked a huge
wave of excitement over the early December weekend as analysts, markets, and the HCM communities
were taken by complete surprise at the announcement.
After a period of due diligence and completion of formalities, the acquisition was officially done on
February 23, 2012. Shortly after completion Lars Dalgaard, at the recommendation of Hasso Plattner,
was appointed to run SAP’s newly formed Cloud Business Unit and joined the SAP Executive Board. As
part of the acquisition, SuccessFactors remained a separate entity from SAP and was rebranded as
“SuccessFactors, an SAP company.”
For the first time SAP was able to offer a full suite of HCM solutions both on premise and in the cloud. It
also provided its customers with the opportunity to combine on-premise applications with cloud
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applications from the same vendor. At the time, many analysts saw the acquisition as a defensive move
and cited the 52 percent above-market-value share price as an indication that SAP was willing to pay
more than was needed to improve its footprint in the growing SaaS HCM and talent management
markets. The price alone was enough to provide SAP with a huge level of exposure and signaled its
intent to focus strongly on cloud offerings in addition to its traditional offerings.
SAP had previously invested a significant amount of money in developing its own cloud ERP suite,
Business ByDesign, but SAP had struggled to develop the offering. Business ByDesign’s lack of success
was commonly attributed to SAP’s lack of cloud expertise. As part of the closure of the acquisition, Jim
Hagemann Snabe, co-CEO of SAP, was quoted as saying that “I believe that what we needed to
accelerate our success was the DNA of understanding the business model in the cloud.”
SAP’s Strategy for SAP ERP HCM and SuccessFactors
On February 22, 2012, shortly after the acquisition was completed, SAP and SuccessFactors announced
their joint Unified Product Direction via press release. David Ludlow, SAP group vice president for HCM
solutions used his keynote address at the HR 2012 conference in Las Vegas in March 2012 to go into
more detail about the planned strategy. Ludlow re-affirmed that SuccessFactors HCM suite (still called the
BizX suite at that time) was to be SAP’s go-forward solution for talent management and revealed that
while continuous enhancements will continue to be made for on-premise talent management solutions, no
further innovations were planned for its suite. SuccessFactors Workforce Planning was also revealed as
being the go-forward solution for workforce planning. A summary of the HCM solutions (also known as
Line of Business for Human Resources or LoB HR) is shown in Figure 2.
Figure 2
SAP’s "go-forward" solutions for SAP HCM processes
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By “go-forward” SAP means that any customers who wish to purchase solutions for these processes will
be positioned with the solutions highlighted in Figure 2. SAP intends to focus its innovation investments
in these solutions. However, SAP will still sell, improve, and support the remaining on-premise solutions
seen in Figure 2, and these on-premise solutions are still available to all customers.
Despite SAP’s announcement of its intention to focus primarily on the SuccessFactors HCM suite for
talent management, SAP will continue to support and invest in on-premise technology. However,
investment in talent management solutions has been minimal since Enhancement Package 4 (EhP4) was
released. SAP Organizational Visualization by Nakisa (SOVN) will remain as the complementary solution
for on-premise customers for organizational chart visualization, organizational modeling, and data quality
auditing. SAP Talent Visualization by Nakisa (STVN) and SOVN will continue to be sold and supported by
SAP, although STVN is not part of SAP’s go-forward strategy for talent management.
There are three delivery models for SuccessFactors HCM: the hybrid model, the two-tier model, and the
full-cloud HCM model. The hybrid model refers to customers using SAP ERP HCM on premise for core
HCM processes (e.g., personnel administration, time management, and payroll) and using the
SuccessFactors HCM suite for talent management and, if required, workforce analytics. Within this model
SAP ERP HCM is an integral part of using the SuccessFactors HCM suite. SAP’s integration strategy and
roadmap is focused around the hybrid model (this is covered in more detail later in this report).
One reason that SAP has chosen to focus its integration strategy on the hybrid model is because many
organizations have already implemented a stable and effective core HR system in SAP ERP HCM, but
want state-of-the-art talent management solutions. SAP considers the SuccessFactors HCM suite as its
best-in-class talent management solution. This fresh wave of talent management solutions is still fairly
new to the marketplace and there is a high level of investment and innovation taking place.
The two-tier model is where a customer chooses to retain SAP ERP HCM as its on-premise system
centrally, but uses Employee Central or other SuccessFactors HCM suite solutions at a regional or
satellite office. Some customers may not have a core HR system at one or more of its regional offices or
want a trial run of a solution prior to a global roll out. This model gives them the opportunity to take
advantage of innovations, fill business system gaps, and explore how SuccessFactors works for their
business.
Full-cloud HCM refers to the entire SuccessFactors HCM suite with SAP Cloud Payroll. Net new
customers (customers who are not using any SAP HCM solutions) and existing customers can leverage
full-cloud HCM to get a complete and holistic suite of HCM functionality within the cloud, with or without
SAP ERP HCM as the system of record. Because some organizations don’t want just talent management
and analytics in the cloud, SAP is able to ensure that all of a company’s HCM needs are realized in the
cloud.
Another key message that was revealed during David Ludlow’s HR 2012 keynote address was that SAP
would not force customers onto its cloud offerings and that it would continue to invest in and offer
innovations for core HR. The new HR Renewal release and Business Suite on HANA announcements are
two examples of innovations from SAP. HR Renewal provides a host of new usability features to SAP
ERP HCM, and Business Suite on HANA provides revolutionary performance and processing that has
been impossible up until now. SAP would also accelerate its investment in SuccessFactors Employee
Central to ensure that it is rich in functionality. So far, SAP has lived up to its promises made in this
announcement.
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At the SAPPHIRE NOW conference held in Orlando in May 2012, Lars Dalgaard used his first keynote
speech as an SAP executive to announce SAP’s overall cloud strategy. This includes SuccessFactors,
Business ByDesign, and SAP’s range of OnDemand applications, such as Travel OnDemand, Finance
OnDemand, and Customer OnDemand. SAP has split its cloud applications into four categories: people,
money, customers, and suppliers. The people category comprises the SuccessFactors HCM suite. Since
this announcement SAP has expanded on its cloud strategy significantly.
Key Misconceptions About the Acquisition
One key misconception that arose when the SuccessFactors acquisition was announced was that
mainstream support for SAP ERP HCM on premise would end in 2020. These fears arose due to the
timing of SAP’s announcement in October 2011 — just two months prior to the announcement of the
acquisition — that it was extending mainstream support for its on-premise SAP Business Suite, which
includes SAP ERP HCM, by five years (from December 2015 to December 2020). December 2015 was
the original date that was set for the end of mainstream support for ERP Central Component (ECC) 6.0
when it was released in 2006. As 2020 draws closer, the mainstream maintenance period is likely to be
extended even further.
As mentioned previously, David Ludlow was keen to highlight that SAP will not force any customers onto
the cloud. While SAP is promoting the SuccessFactors HCM suite, particularly for talent management, it
will continue to offer its on-premise talent management functionality and, therefore, there will be no
shortage of implementation partners to provide services for this. SAP will not pressure customers to rip
and replace their core SAP ERP HCM system for SuccessFactors Employee Central, but they enable this
possibility for customers who choose to follow this path. SAP is committed to allowing customers to
choose which technologies they wish to use for different processes.
Customers should not interpret the current support end date of 2020 as being the end-of-life support for
SAP ERP HCM on premise. Rather, that is the end of the current period of support for SAP ERP HCM,
and an extension is extremely likely to be announced in the next few years. It should not be forgotten that
SAP chose to extend the deadline before the announcement of the SuccessFactors acquisition, showing
its commitment to the on-premise suite for a further five years irrespective of cloud strategy.
How SuccessFactors HCM Suite Differs from SAP ERP HCM
SuccessFactors HCM suite differs in a number of ways from SAP ERP HCM. Although both solutions
cover many of the same process areas, this is largely where the similarities end. The user interface and
design principles, administration and data maintenance, configuration, licensing, implementation, mobility,
release cycles, and support for SuccessFactors differ considerably from those with which existing SAP
users are familiar.
User Interface and Design Principles
SuccessFactors prides itself on the “toy-like” user interface and the user experience of its applications.
SuccessFactors’ design is in line with its own version of the SMART principles – Social, Mobile,
Analytical, Rich and Toy-like – and with extensibility in mind. Extensibility is a design principle that
considers future growth of a system through adding, extending, or enhancing system functionality.
SuccessFactors is also influenced by the principles behind business execution strategy and therefore
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considers these when building or extending functionality. More recently, Lars Dalgaard announced that
there should be a “mobile-first” principle behind application design.
The user interface of SuccessFactors HCM suite is a modern-looking and sleek interface that is
characteristic of the advancements in Web technology over the last decade and transition to Web 2.0.
When ECC 6.0 was released this type of interface was unknown in consumer and enterprise-level
applications and is strongly associated with the type of interface Apple introduced as part of its desktop
and smartphone operating systems.
The user interface of SuccessFactors HCM differs greatly from both the SAP GUI and SAP NetWeaver
Portal, as can be seen in Figure 3.
Figure 3
The home page of SuccessFactors HCM suite
Users can navigate to different parts of the applications from the tiles on the homepage or to each module
from the navigation drop-down menu in the top-left corner of each screen. Since the HCM suite is
essentially a Web application it benefits from hyperlink navigation to move between different pages. The
applications are also heavy in their use of colors, graphics, and images to provide visually appealing
features and emphasize particular functionality or information. Figure 4 shows the Public Profile of an
employee, including the employee’s photo, background, “badges” that have been earned, and the
employee’s location in the Org Chart.
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Figure 4
The Public Profile of an employee
The badges shown in Figure 4 are one concept that is not found within the SAP system. These are used
to reward employees for a number of actions, including good performance or behaviors that provide value
to a team or the organization as a whole. Other features include Legal Scan, which scans user-inputted
text for words that may be illegal or inappropriate, and Tags, keywords used to help identify employees.
SuccessFactors is focused more on the employee, as opposed to objects of different types as in SAP
ERP HCM. SuccessFactors is not strictly object-orientated, so creation and maintenance of the enterprise
is focused more around positions and employees. The concept of organizational units does not exist in
SuccessFactors; rather positions can be assigned attributes about their organizational assignment,
including Company, Business Unit, Division, and Department. This gives a deeper granularity than in SAP
ERP HCM, where the standard organizational assignment is focused purely on the organizational unit.
SuccessFactors’ applications are designed with a mobile-first mentality. This ensures that applications are
created with simple functionality. The iPhone generation is joining the workforce and is used to using
simple and attractive apps on their devices, so it makes sense for the next generation of enterprise
applications to follow these design principles. Unlike SAP ERP HCM, SuccessFactors includes its BizX
Mobile application as part of the base license for the HCM suite. At the SuccessConnect 2012
conferences – held in San Francisco, London, and Sydney – there was a strong theme of mobility through
the sessions and keynotes.
SuccessFactors Administration and
Configuration
SuccessFactors provides an Admin User login that provides a system administrator with general
administration functions, including importing and maintaining organizational data, creating and managing
the Welcome message and Quick Links tiles, managing user passwords and permissions, and viewing
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administrative alerts such as stalled workflow requests, people issues, and HR data issues. This type of
user does not exist per se in SAP ERP HCM, although a Basis or power user would normally perform this
type of monitoring or perform these activities. Figure 5 shows the home page for an Admin User with the
different tiles that are available for this type of user.
Figure 5
The Home page of SuccessFactors HCM suite for an Admin User
The Admin User can perform system configuration activities through the OneAdminpage, shown in Figure
6. A large number of configurations can be performed in OneAdmin, as well as actions such as hiring new
employees, managing pending hires, creating new positions, and maintaining organizational assignment
data. This is a fundamental change from SAP ERP, in which the system is configured in the IMG and
organizational data is created using transaction codes. In SAP, HCM data is organized into infotypes,
while in SuccessFactors it is organized by function. For example, in SAP ERP HCM employee data is
stored in and maintained via a number of different infotypes, while in SuccessFactors Employee Central
data is accessed and maintained in pages such as Employee Profile or Employee Information. There is
no concept of infotypes in SuccessFactors.
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Figure 6
The Admin Tools page for an Admin User
The SuccessFactors systems itself is configured via Provisioning, which is the backend of
SuccessFactors. Customers do not have access to Provisioning – only implementation consultants have
access. Here certain system functionality and behaviors can be switched on or off. Only implementation
consultants who have completed the Introduction to Mastery training course get Provisioning access and
it can only be linked to customer instances for projects where they have completed the Mastery course.
This ensures that only trained consultants can implement SuccessFactors solutions.
There is a common misconception that SaaS applications are not highly configurable, although the reality
is quite different. Although SaaS applications are not as flexible – or customizable – as on-premise
applications, they still have a high level of flexibility when enhancing standard behavior.
For certain features, SuccessFactors supports configuration via XML files. However, this configuration is
usually performed by the customer’s implementation partner or by a SuccessFactors Professional
Services consultant. SuccessFactors is looking to move away from this type of configuration.
SuccessFactors offers another method of configuration, which is an object model configuration
mechanism called the Metadata Framework. The Metadata Framework enables customers to make
changes to the configuration of SuccessFactors through the Admin Tools user interface, such as
modifying existing objects, creating new objects, modifying business rules, or creating new interfaces.
New objects can be created with various attributes, such as effective dates, user interface (UI) behavior,
security, reporting, language-dependent texts and translations, rule-based validations and logic, and
approvals. These new objects can be similar to traditional SAP objects, such as a new type of Work
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Center object, or simply new fields. Existing objects can have attributes modified to fit customer-specific
logic or behavior, such as compensation logic or cost center validations.
This model allows users complete control over creating new objects without performing any coding or
custom development. However, unlike in on-premise SAP, the objects created in SuccessFactors can
have attributes that are unique to those specific objects. There are no specific infotype controls or validity
restrictions. This is a principle that is new to SAP on-premise users and initially the concept might seem
alien or limited in its practical use.
One of the major advantages of the Metadata Framework is that customer metadata is separate from the
SuccessFactors metadata. Users can never overwrite what SuccessFactors delivers, although they can
switch it on or off. Therefore the challenges users can face with conflicts when going through
enhancement package or Support Package upgrades simply do not occur when new updates are
introduced into the SuccessFactors system. When users enhance or extend the data model in
SuccessFactors using the Metadata Framework they are creating objects that sit next to the existing data
model, rather than sitting within it. These new objects work with the system as if they are part of the
standard data model, without creating errors or conflicts. These objects – no matter how many – leverage
a single instance of components (e.g., UI components, processing objects, and workflow objects) and
therefore performance is significantly greater than if every object had its own unique instance of
components.
Custom applications can be added into SuccessFactors using the SAP HANA Cloud Platform, as
Platform-as-a-Service (Paas). This is fairly new technology at this time, but a video demo of this
functionality can be seen on YouTube here.
Licensing: SAP vs. SuccessFactors
One of the major differences between SAP and SuccessFactors is the licensing model. SAP solutions
(e.g., HCM) are licensed per user on a perpetual basis for a one-off license fee, plus an annual
maintenance fee. In contrast, SuccessFactors solutions are licensed per user on a subscription basis per
year. No additional maintenance is charged.
The cloud-based licensing model used by SuccessFactors has its advantages and disadvantages. There
is no large capital expenditure for licensing and yearly charges are made for the exact amount of usage
(i.e., customers are only charged for the exact number of users that use the system). Customers are also
not tied into using SuccessFactors forever – they are able to exit the contract at the end of the contractual
period, which is usually for three years in length, without incurring additional licensing costs or losing part
of the one-off licensing fee that would be paid for an on-premise license. Although one-year contracts are
available, the average contract for a large customer is usually three years.
Implementation: SAP vs. SuccessFactors
Implementing SuccessFactors is different from what many on-premise SAP users are used to. First off,
SuccessFactors HCM suite cannot be implemented without the involvement of SuccessFactors. With the
exception of third-party extension products such as SOVN or SAP Employee File Management by
OpenText (SEFM), most SAP users are accustomed to having their consulting partner perform all the
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implementation activities required during a project. Likewise, some consultants may not be comfortable
working with a third party during an implementation.
The role of a consultant during implementation of one or more SuccessFactors solutions differs from the
type of roles that exist during an on-premise implementation. Quite often only a single consultant is
required to perform all project roles, and these tend to be focused on activities such as scoping of
customer requirements, data field mapping, and testing. In some instances an integration consultant may
be required to perform the technical integration. Typically SAP ERP HCM projects, depending on the
solution, have been staffed by multiple consultants and in some cases have involved multiple teams
made up of several consultants. However, since SuccessFactors is focused around best-practice
configuration and accelerated time frames, fewer resources are required to deliver a project and they are
needed for shorter periods of time.
In some cases, specialist SuccessFactors consultants (those not working for SuccessFactors
Professional Services) have been working on multiple projects simultaneously, each on a part-time basis.
This change alone will cause a significant shift in the SAP ERP HCM consulting business over time, since
the current level of revenues sourced from on-premise implementations will not be sustainable for most
consultancies. This benefits customers who choose to implement SuccessFactors solutions by providing
them with much cheaper implementations.
SuccessFactors’ BizXpert Implementation Methodology
Another difference in implementation projects is SuccessFactors’ own implementation methodology,
which is called BizXpert. The BizXpert methodology can differ from the methodology used by
consultancies for on-premise implementations, since many consultancies use the ASAP or Agile
methodologies, or a variation of these. With SuccessFactors, the BizXpert implementation methodology is
used so that the implementation is delivered quickly and the outcomes are consistent with each project
that is delivered.
The BizXpert methodology contains five phases, many of which may seem familiar to those who are
acquainted with the ASAP methodology. The five phases are outlined in Figure 7.
Figure 7
The phases of the BizXpert implementation methodology
Each phase has a purpose, a set of objectives, and a set of deliverables. Many of the phases include
best-practice activities that often are excluded from customer projects. This is one of the benefits of the
BizXpert methodology – no SuccessFactors customer is at risk of missing out on crucial aspects of a
project that are not specific to the software itself. The importance of including activities such as defining
success criteria, risk assessment, and a communications strategy cannot be overestimated in ensuring
the ultimate smooth delivery of a successful implementation.
The Sales phase is not an official project phase, rather it is the period prior to the project starting, but it is
helpful to understand how this period sets the foundation for the overall project. This is where the scope
and pricing and Statement of Work (SOW) are produced and the project is transitioned from the sales
team to the implementation partner or SuccessFactors Professional Services.
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The first phase is the Prepare phase and is designed to establish the project framework and project
objectives, orientate the customer with SuccessFactors and the project team, define the success criteria
for the project, and undertake the configuration workshops. Many projects do not have the success
criteria defined at the outset, despite how important it is for customers to identify what they deem to be
the critical criteria for the success of the project.
The Realize phase is where the configuration of SuccessFactors takes place. One major difference
between the BizXpert methodology and the ASAP methodology is the inclusion of three configuration
cycles, rather than one. These cycles – called iterations – allow customers to review the configuration
defined in the Define phase after the first and second iterations, and tweak accordingly. This gives
customers flexibility in getting their system configured as per their expectations. In many implementations
it is not an uncommon experience for customers to get to the testing phase and discover that something
doesn’t work quite like they had expected. In many projects additional changes to the original blueprint
must be made via Change Requests, the result of which is very often additional, unplanned-for costs.
This phase also features the data migration and integration designs.
The fourth phase – the Verify phase – is where the testing and training occurs and the go-live activities
begin. The roll-out activities include execution of the communications, training, and risk management
strategies.
Finally, the Launch phase is where the go-live activities are completed, the customer transitions to
SuccessFactors support, and the project comes to a close.
Mobility
SuccessFactors has a strong focus on mobility and has two offerings for smartphones and tablet devices
– BizX Mobile and Headlines – which it offers for free. This is in contrast to on-premise SAP, which offers
a range of mobile applications but has a myriad of licensing approaches and extensive technological
prerequisites to get going, such as SAP NetWeaver Gateway and Sybase Unwired Platform. While it can
be difficult for SAP ERP HCM customers to build a business case for mobility, with SuccessFactors’ BizX
Mobile applications there is little reason not to roll it out across the organization. Figure 8 shows the
SuccessFactors BizX Mobile application front screen.
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Figure 8
SuccessFactors BizX Mobile on the Android operating system
Release Cycle
SuccessFactors releases new functionality and bug fixes on a quarterly basis, as opposed to on-premise
SAP, which releases new SAP ERP HCM functionality via enhancement packages approximately every
18 months, and releases bug fixes ad hoc via SAP Notes or in bulk as part of Support Packages. SAP
has also recently introduced Feature Packs for the HR Renewal release in order to deliver functionality on
a quarterly basis. New releases by SuccessFactors are made to all customer instances, although, by
default, all new functionality is switched off and so it is up to the users as to whether they wish to enable
any of the new functionality.
This differs from SAP ERP HCM, where implementing enhancement packages or Support Packages can
be time-consuming. Enhancement packages might only provide a minimal amount of functionality versus
the effort to implement, depending on the functionality used in SAP ERP HCM. In SuccessFactors, each
release is added to the system by SuccessFactors so there is no action needed from the system
administrator if none of the new functionality is required.
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SuccessFactors’ quarterly release cycle means that rapid innovation can occur and regular
enhancements can be introduced. While this can be overwhelming for some organizations, it can also
mean that organizations can adopt new functionality without waiting for long development periods or
costly and difficult upgrade projects. New customers might not even be aware that they have had new
functionality introduced into their system.
SuccessFactors releases are released in February, May, August, and November of each year.
Support
SuccessFactors has its own support process and Support Portal for customers; this will continue to be the
case for new and existing SuccessFactors users going forward. The SuccessFactors Support Portal
allows users to perform similar activities as on-premise SAP users can in the SAP Support Portal, such as
raise support calls and search knowledgebase articles.
Since a large proportion of SuccessFactors’ customers are not SAP customers and the support process
differs, it does not make sense to change the current support situation and it seems unlikely that SAP will
merge its and SuccessFactors’ support processes or organizations. Without experienced or
knowledgeable support consultants within SAP right now it simply doesn’t make sense for SAP to go
down this route at this time.
In addition to their Support Portal, SuccessFactors customers also have the SuccessFactors Community
Web site. This provides forums for general and product topics, thought leadership topics, training,
support, and event information.
A Deeper Look into the Technical Aspects of
SuccessFactors
The SuccessFactors HCM suite also differs from SAP ERP HCM from a technical perspective. Like many
Web applications, the SuccessFactors HCM suite is primarily built in Java and uses the J2EE
specifications. Every page that is accessed by the end user is dynamically produced by the application
and encrypted using SSL technology. The application is a stateless application, meaning that each
request is an independent transaction and unrelated to the previous request. This is part of the reason for
good performance in the cloud – the memory required is significantly lower than non-stateless
applications (such as on-premise applications).
Application Architecture
The core application cannot be modified, nor can it be enhanced with a built-in programming language
such as ABAP. Like many other Web applications the behavior of the application is influenced with
configuration through XML configuration files. The application architecture is shown in Figure 9.
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Figure 9
SuccessFactors application architecture
One of the fundamental differences in architecture between SAP ERP HCM and SuccessFactors is that
SuccessFactors HCM suite is a multi-tenancy platform. Multi-tenancy is the use of a single instance of
software using a single database instance for all customers, in which multiple sets of configuration (called
tenants) exist. Each customer has its own tenant that contains its unique set of configuration and its own
database schema within the database. This type of model differs significantly from the SAP ERP HCM
world, where many differing instances of SAP are on different versions, hardware, operating systems, and
databases across the customer base. As a result, using a SaaS solution such as SuccessFactors HCM
includes the following features:
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•
•
•
•
•
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Regular releases
Latest version of the software is used across all customers
No hardware and licenses for operating system and database required
Optimal hardware and software combination
Consistent performance and stability
More manageable and efficient support and maintenance
Data mining and aggregation for analytical benchmarking
Because all users are using the same application, they benefit from always having the latest features and
bug fixes available – either as a new user or as an existing user. It also provides greater stability because
products naturally become more bug free as they move through their product life cycle. Of course,
because of the nature of multi-tenancy systems, one drawback is that changes to the application code or
substantial customizations are simply not possible. Since talent management strategies and processes
are unique to and dynamic in many organizations, the inability to customize the HCM suite to the same
extent as SAP ERP HCM might be a sticking point for some companies to move to the cloud.
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There are numerous direct and indirect cost savings for customers using SaaS software. There are the
obvious cost savings made from removing the procurement of hardware and associated software. In the
SuccessFactors whitepaper, “The Cloud: When & Why?,” it was demonstrated that, on average, 19
percent of the cost of implementing an on-premise HRIS was for hardware costs and database licenses.
However, there are also the cost savings that are passed onto customers by the vendor from the
economies of scale that they achieve from streamlining their hardware resources. As the system owners,
the vendor already will have ensured that it has the optimal hardware that is required for highperformance and the stable operation of its software. It is not unknown for outsourcing organizations to
cut corners when hosting customer systems on their hardware or for inexperienced consultants to
incorrectly advise customers when procuring hardware for SAP or related systems.
Having a consistent codebase makes support an easier process for SuccessFactors. Experienced
consultants know the pitfalls of having a number of components in an SAP system on different versions
and patch levels; with so many combinations of components it is inevitable that product bugs will occur for
some customers that did not occur for other customers. Usually product bugs require some level of
investigation and support from SAP Support, but it is not unknown for users to create workarounds to
avoid the support process. Experienced consultants also know that new SAP ERP HCM installations can
contain bugs that have fixes in SAP Notes, but for inexperienced consultants this can lead to
unnecessary Customer Support messages (known as CSS or OSS messages) being raised with SAP
Support when a fix already exists. Obviously, with a SaaS solution, only new and unknown bugs are likely
to be discovered, but once identified they can be fixed for all customers quickly. The downside is that
non-urgent fixes are only available in the next release.
A unique feature available to SaaS customers is the ability to have analytics benchmarks based on
aggregated data from all customer tenants. Until the invention of SaaS, this type of data was impossible
to provide. Now, customers using SuccessFactors Workforce Analytics have the option to compare their
analytics to benchmarks formulated from the data of multiple customers. It is worth noting that customers
using SuccessFactors Workforce Analytics have the option to opt in or opt out of having their data
(anonymously) used in the application’s benchmark analytics.
For many customers the inability to customize SuccessFactors HCM applications can be a reason to stay
with on-premise. With SuccessFactors, if a particular piece of functionality does not exist then a customer
has to do without it. However, as mentioned previously, the SAP HANA Cloud Platform can provide the
ability to add entire new applications into SuccessFactors. With SAP ERP HCM, specific user
requirements can often be accommodated by using either the object-model and infotypes enhancements
or by using one of the many technologies that SAP has created for extending the system, such as user
exits, Business Add-Ins (BAdIs), and the ABAP Workbench. This provides an almost limitless number of
methods in which complex user requirements can be met in SAP ERP HCM.
Another potential downside for SaaS customers is that any period of downtime, whether planned or
unplanned outages, affects all tenants. This is also a possibility with any unexpected side-effects of
introducing new functionality or bug fixes. However, the restriction of SuccessFactors HCM being
configurable but not customizable – at least in the same way as SAP – ensures that all tenants comply
with the application’s data model and application framework.
Security in SuccessFactors
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One of the biggest concerns for companies when they are considering a SaaS solution is security. While
many feel that they have complete control of security only when using SAP ERP HCM, it is worth
highlighting that SuccessFactors has a strong number of security standards and mechanisms in place to
protect its systems and its customers’ data. There is a widespread perception that data is less secure in
the cloud, yet, in reality, the opposite is more likely to be true. This is generally because, although the
larger customers using SAP ERP HCM may have dedicated security teams, a number of smaller
customers do not have the resources to dedicate a specialist team to manage security in the same way
that a cloud vendor like SuccessFactors could.
Internally, SuccessFactors classifies security as a product itself and it has a strong focus on data
handling, privacy, and protection. SuccessFactors is a specialist in processing and protecting customer
data. Since providing secure software services is the core business of SuccessFactors, it has in-house
expertise to provide the correct level of protection that is required to safeguard users’ sensitive data.
When it comes to handling of customer data, contractually SuccessFactors is a data processor and not a
data controller. It has no rights or warrants to customer data and can only perform actions with their users’
data that are specified in the contract between the two parties. The customer always retains ownership of
its data and can, at any point, download a CSV file of all its data from SuccessFactors.
SuccessFactors separates between sub-contractors and sub-processors within its infrastructure and only
sub-processors potentially have access to data, although this doesn’t necessarily mean they will access
it. SuccessFactors ensures that the contractual obligations that it has with its customers are part of the
agreements that it has with all of the sub-processors that may have access to user data. One example is
a supplier of database administration services to SuccessFactors and who is considered a sub-processor.
SuccessFactors has specific contractual clauses in the contract that are modeled around EU data clauses
and the supplier must also be Safe Harbor certified. SuccessFactors also audits the supplier on a yearly
basis to ensure that it complies with SuccessFactors’ own security and privacy standards. The outcome of
this audit is both logged and described in a 300-page report.
SuccessFactors, like SAP, audits against and assesses its own security standards on a regular basis. It
aims to have transparent standards so that customers can not only trust that SuccessFactors security
standards are adequate, but also ensure that they do not have to perform their own audits of
SuccessFactors’ security standards. SuccessFactors also performs ongoing application and infrastructure
penetration testing.
SuccessFactors security standards are based on the strict UK BS10012 standards for data privacy and
the ISO27002 framework for security standards. The UK BS10012 standards have been adopted by
Germany to govern its data privacy standards. SuccessFactors also sits on various cloud security
committees and complies with a host of continental and global security standards and certifications,
including:
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EU Directive 95/46/EC (also known as the Data Protection Directive)
Payment Card Industry Data Security Standard (PCI DSS)
ISO27002
BS10012
SSAE-16 SOC2
ASIO-4
FIPS 140-2 level 3 certification
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•
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U.S. government FISMA accreditation (OPM/DHS/NTIS)
Safe Harbor certification
SuccessFactors has various security protections at each of the layers of its service and infrastructure,
including the physical site, database, middleware, application, and network and communication
channels.
SuccessFactors has two data centers each in North America, EMEA (located in St. Leon Rot, Germany),
and Australia. As well as providing the SuccessFactors services, the data centers in each region act as a
disaster recovery for each other, and data replication between the two data centers runs in near real time.
All data centers are high-availability, network access protected, and ANSI/TIA/EIA-942 Tier III+ rated
facilities connected by IPSEC Secure Tunnels. Each server has Host-Based Intrusion Detection System
(HIDS) server protection, plus a host of leading antivirus, anti-hacking, and vulnerability detection
software that runs on a daily basis. In addition to these, the data centers have a number of physical
security measures including 24-hour security guards, closed-circuit camera monitoring, and adverse
weather protection. The administrators of productive systems at SuccessFactors are subject to
compulsory multi-factor authentication.
On the database layer SuccessFactors has numerous controls for activity monitoring and blocking, data
change logging, and auditing on its databases and all stored data is encrypted with AES at a minimum of
128 bits. All changes to data are logged in encrypted and unalterable log files with a variety of attributes.
Additionally, data is also backed up on a nightly and weekly basis. The middleware layer – the platform
that SuccessFactors runs on – has various authentication security provisions that include single sign-on
(SSO), federated identity management, SAML 2.0 Assertion, and segregation of duties (SoD).
Applications in the SuccessFactors HCM suite comprise the application layer, and the built-in role-based
permissions (RBP) mechanism is the main form of security used. RBP is similar to the authorization roles
used in the SAP authorization concept. Using RBP means that security is managed at all levels of
SuccessFactors applications, including the function, transaction, field, and data levels. Like roles, the
RBPs are often based on activities that must be performed by the user for whom the role is defined. As a
result, roles can be managed centrally in the same way that they are within on-premise SAP systems.
SuccessFactors also requires that users have a minimum set of privileges to perform certain functions, so
it is not possible to accidentally provide access to a certain function by granting of one type of privilege.
SuccessFactors’ applications are designed to automatically log the user out after 30 minutes of inactivity.
Passwords are sent to the application server from the client machine using SHA-1 hash encryption.
SuccessFactors does not have a structural authorization concept, which some organizations may
consider to be a limitation or barrier to adoption. Access is based on an area of responsibility and RBPs
are assigned easily by a systems administrator rather than a security expert. RBP is flexible and can be
easy to configure compared to SAP authorizations while still offering a great deal of flexibility. In fact,
someone without experience in configuring authorizations and security should be able to configure RBP
in SuccessFactors. For complex or global organizations that use dotted-line or matrix management, the
matrix manager concept of SuccessFactors may be sufficient to provide multiple access points to data
maintenance as an alternative to structural-based authorizations. Organizations with a strong need for
structural authorizations should take into consideration whether SuccessFactors can meet their security
requirements during evaluation of the HCM suite.
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The network and communications layer uses well-known standards for transferring data, including
VeriSign-certified SSL/TLS, SFTP, and SSH.
System Availability
SuccessFactors contractually promises a minimum of 99 percent system availability to customers outside
of regular and emergency maintenance windows and, as a result, has carefully considered the steps
required to maintain high availability in each of their data centers. And because SuccessFactors’
applications are accessed through the cloud, performance is also a critical factor for high user
satisfaction.
In each data center the servers used for tier of the service (e.g., network, database, and application) are
clustered and load balanced to spread traffic demand and act as a failover to prevent interruption or loss
of service. Fallback servers – replicas of the active production servers – are on standby in case of an
upsurge in usage. SuccessFactors create forecasts of future demand based on historical usage and new
subscriptions on a monthly, quarterly, and yearly basis to ensure that adequate servers are in operation
and on standby.
To monitor and quantify application performance, SuccessFactors simulates the end user experience
every 15 minutes from 10 different locations. The performance of each server is monitored in real time
and the application source code is monitored in real time by a source code profiler. Internal network traffic
is also limited so that only the data required by the application is transferred internally.
Integration Between SAP ERP HCM and
SuccessFactors HCM Suite
Integration is one of the hottest topics when it comes to SuccessFactors. SAP is still in the early stages of
developing its platforms for integration between SAP ERP HCM and the SuccessFactors HCM suite,
although it has already formulated and announced its integration strategy. The strategy is centered on
providing integration for the hybrid model and therefore other integrations, such as those for Employee
Central and SAP Jam, are not included in this strategy. Saying this, SAP does already have integration
between SAP ERP HCM and SAP Jam and provided some integration between SAP ERP HCM and
Employee Central (full-cloud HCM) in Q4 2012.
Integration Strategy for SAP ERP HCM and SuccessFactors HCM Suite
SAP’s integration strategy focuses on three main areas of integration:
1. Data – Data foundation so that SuccessFactors applications can use SAP ERP HCM data
2. Process – Integration of specific end-to-end HR processes with SAP ERP HCM
3. User experience – Unified access and seamless navigation for end users
Data integration sets the foundation for point-to-point integration with SuccessFactors so that SAP ERP
HCM data can be used in the various talent management applications in the SuccessFactors HCM suite.
The hybrid model SAP ERP HCM is the system of record for employee and organizational master data,
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so SAP intends to deliver integration to upload this data to SuccessFactors on a periodic basis. The main
aim is to ensure that data is not entered into two systems twice.
Process integration is ensuring that data produced in talent management processes in SuccessFactors,
such as compensation or recruitment, is stored back in the SAP ERP HCM system and used in the
various dependent processes, such as payroll or hiring actions. Providing loosely coupled integration,
rather than full real-time integration, is strategically designed to enable hybrid processes to be executed
without creating changes to SAP ERP HCM data prior to the point at which they are needed.
User experience integration is about providing a fully unified experience for end users when accessing
SuccessFactors applications from Employee Self-Service and Manager Self-Service in SAP NetWeaver
Portal and NetWeaver Business Client (NWBC). SAP’s intention is for users to access the different
systems without realizing that they have left one application and entered another. It is also SAP’s
intention that SAP NetWeaver Portal or NWBC and SuccessFactors applications can be accessed from
within the same drop-down menus and screens. This includes the use of SSO, unified navigation
structures, and integrated menus. SAP wants to prevent segregated access for different applications so
that the user experience is seamless enough for users to not even notice that multiple systems are used.
The biggest challenge SAP faces here is that the SuccessFactors user interface differs from SAP
NetWeaver Portal and NWBC both in layout and design, despite the theme configuration that can be
done in both platforms.
Technology for Hybrid and Full-Cloud HCM Integration
SAP’s integration strategy is based around two types of integration technology: file transfer and
middleware. SAP’s first integration package relied on a flat-file transfer, although from the third package
(Service Package 2), middleware integration was offered via SAP NetWeaver Process Integration (PI)
and middleware integration also will be available with the forthcoming SAP HANA Cloud Integration (HCI)
platform. Figure 10 displays the integration technology options for the hybrid model.
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Figure 10
Integration technology options for hybrid integration
Dell Boomi AtomSphere is the de facto integration platform used between SAP ERP HCM and
SuccessFactors Employee Central and this integration scenario is part of the full-cloud HCM model. For
SAP Jam, the Social Media ABAP Integration Library (SAIL) is provided by SAP and this scenario is part
of both the hybrid model and the full-cloud HCM model.
SAP’s flat-file integration option is delivered as part of the first integration package and provides a single
direction upload of employee and organizational data from SAP ERP HCM to SuccessFactors using an
SAP program and FTP server, as demonstrated inFigure 11. This integration option is free for all SAP
ERP HCM customers. More details will be covered later in this article when the integration packages are
examined.
Figure 11
Architecture of flat-file integration
SAP NetWeaver PI, previously called SAP Exchange Infrastructure (SAP XI), is a middleware integration
solution used to integrate and transfer data between different SAP technologies. Around 35 percent of
SAP ERP HCM customers use PI and therefore can benefit from leveraging this technology to use SAP’s
integration packages. Since SuccessFactors is considered an SAP system, there is no additional
licensing for customers wishing to use their existing PI installation to integrate SAP ERP HCM with
SuccessFactors.
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However, customers who do not have PI would have to invest in licensing and implementing PI to
integrate these platforms if they do not wish to wait for the release of SAP’s upcoming cloud-based
middleware integration solution, HCI. HCI is a PaaS integration solution that will be used for integrating a
number of SAP’s new cloud solutions with SAP on-premise solutions. It was released in March 2013 for
Ramp-Up and for customers who are part of SAP’s Customer Engagement Initiative, and it is planned for
general availability at the end of 2013 or beginning of 2014.
HCI will be priced at 7.5% of the subscription of the SuccessFactors application, with a minimum cost of
€12,500. At the time of this writing, it is currently available for Performance & Goals, Compensation, and
Recruiting. Initially only SAP Professional Services will be able to implement HCI, although SAP does
plan to open up implementation capabilities for partners. Figure 12 is an overview of the architecture for
the middleware integration platforms, which are represented by “SAP Integration Technology.”
Figure 12
Architecture of middleware integration for compensation process integration
Dell Boomi AtomSphere is a PaaS integration solution that is used for full-cloud HCM integration. This
technology has been used by SuccessFactors to integrate a number of on-premise HCM systems with
Employee Central. It has a graphic user interface with drag-and-drop workflows and wizards for easy data
modeling. The license of Boomi AtomSphere is included in the base SuccessFactors Employee Central
subscription and SAP has specified that Boomi AtomSphere should not be used in any other SAP
integration scenarios other than integrating SAP ERP HCM with SuccessFactors Employee Central.
Therefore, Boomi AtomSphere is not used for hybrid integration scenarios.
Hybrid Integration Packages
SAP delivers a number of integration packages to provide the integration scenarios that are set out in its
strategy. Some of these packages have already been delivered and are available on SAP Service
Marketplace.
SAP has planned to deliver five packages in its first wave of integration package releases. Additionally,
SAP has already released a Cookbook for configuring SSO, a Rapid-Deployment Solution (RDS) for the
third integration package, and a Cookbook for integrating multiple SAP ERP HCM systems to
SuccessFactors. Below is a summary of the five packages:
1. First integration package: Integration Add-on 1.0 for SAP HCM and SuccessFactors
2. Second integration package: Integration Add-on 1.0 for SAP HCM and SuccessFactors Support
Package 1
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3. Third integration package: Integration Add-on 1.0 for SAP HCM and SuccessFactors Support
Package 2
4. Fourth integration package: Integration Add-on 2.0 for SAP HCM and SuccessFactors
5. Fifth integration package: Integration Add-on 2.0 for SAP HCM and SuccessFactors Support
Package 2
The first integration package, Integration Add-on 1.0 for SAP HCM and SuccessFactors, was released for
Ramp-Up on May 11, 2012, and went on general availability on August 10, 2012. This package provided
point-to-point integration using a flat-file upload mechanism. It works through an SAP report that
generates a CSV file that is uploaded to SuccessFactors via FTP. This file contains 29 pre-defined fields
and up to 15 customer-specific fields, all of which can be selected from standard SAP fields or defined via
a customer-specific BAdI (for both the pre-defined and customer specific fields). There are also 30
extractors to extract data for use with SuccessFactors Workforce Analytics. Full details of the fields,
reports, and security roles can be found in the Administrator Guide on SAP Service Marketplace under
Release & Upgrade Info > Installation & Upgrade Guides > SAP Business Suite Applications > SAP ERP
Add-Ons > Integration Add-On for SAP ERP HCM and SuccessFactors. The package currently has an
end of mainstream maintenance date of June 30, 2014. The technical name of this add-on is SFIHCM01.
Support Package 1 for Integration Add-on 1.0 for SAP HCM and SuccessFactors was released in
September 2012, with the primary focus of introducing delta-file handling for the integration package.
Previously an entire data extract was required for each CSV file that was generated, but Service Package
1 introduced functionality so that only changes were extracted. Additionally it includes some new fields, a
report to remove inactive employees, and a number of SAP Note corrections for the initial package.
Support Package 2 for Integration Add-on 1.0 for SAP HCM and SuccessFactors was released on
November 5, 2012, and was quite significant because it was the first package to support the use of
middleware integration and the first to introduce process integration. The focus of this Support Package is
to introduce the transfer of employee and organizational data via one of the middleware platforms and
introduce bi-directional data transfer to support the compensation process (known as pay-forperformance). This process integration involves transferring salary and pay data to SuccessFactors and
then transferring the resultant compensation data back to SAP ERP HCM, where it must be activated to
be written to the infotypes used in payroll and production of compensation statements. This process is
shown in Figure 13. The process integration supports approved merit increases, bonuses, and lump-sum
payments with integration with SAP Payroll.
Figure 13
Architecture of compensation process integration
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One of the striking factors for users is that, even though middleware integration is used, the integration
does not use real-time or near-real-time data transfer. While many users might find this unusual, the
decision by SAP to refrain from using real-time integration was influenced by their co-innovation
customers. Because the compensation process is a step-by-step approval-based process, it made sense
for customers to have data pulled back to SAP once the compensation process was completed in
SuccessFactors Compensation.
For this package it is important to note that one of the middleware platforms is a prerequisite for
transferring the compensation data, although it is not a prerequisite for transferring the employee and
organizational data as the flat-file mechanism is still available. Another important point is that configuring
or implementing any part of Enterprise Compensation Management (ECM) – the on-premise
compensation management module from SAP – is not required because the sole application for
performing compensation management in this scenario is SuccessFactors Compensation.
Support Package 3 for Integration Add-on 1.0 for SAP HCM and SuccessFactors was released on
December 12, 2012 and included a number of bug fixes for the integration scenarios released to this
date. Support Package 4 will also include a number of bug fixes and is due for released in Q1 or Q2
2013.
Integration Add-on 2.0 for SAP ERP HCM and SuccessFactors was released for Ramp-Up on March 18,
2013, and went on general availability on August 16, 2013. The package includes attract-to-hire process
integration for SuccessFactors Recruiting. This allows hiring and transfer actions to be started in SAP
ERP HCM once an employee has accepted a job offer in SuccessFactors Recruiting. The end-to-end
process covers the recruiting process from planning vacancies through to filling a vacant position. Figure
14 shows the process integration flow.
Figure 14
Architecture of Recruiting Management process integration
This package is significant because it has various integration points between SAP ERP HCM and
SuccessFactors Recruiting Management. Data will flow from one system to the other depending on the
stage of the recruiting process, unlike the compensation process in which data is transferred from SAP
ERP HCM to SuccessFactors Compensation and then back from SuccessFactors Compensation to SAP
EPR HCM once it has been used in the compensation process.
Support Package 2 for Integration Add-on 2.0 for SAP HCM and SuccessFactors was released on
September 6, 2013. The package includes define-to-hire process integration for SuccessFactors
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Recruiting and enables requisition requests to be created in SuccessFactors Recruiting using employee,
organizational, and vacancy data from SAP ERP HCM. The technical name of this add-on is SFIHCM02.
Future integration packages will be released in 2013 and 2014 for Skills and Competencies and Learning
integration. Integration packages are also under consideration for Onboarding and Succession
integration.
The release of the rapid-deployment solution package SAP ERP HCM Integration to SuccessFactors
rapid-deployment solution followed the release of Support Package 2. This rapid-deployment solution
provides users with a rapid implementation of the integration package by either SAP or an SAP partner.
The SAIL technology is used to integrate SAP ERP HCM and SAP Jam and is part of SAP NetWeaver
from specific Support Package Stack releases of the SAP_BASIS component. Although no integration
packages have been released, SAP released the SAP JAM ABAP Integration Configuration Guide in
November 2012.
In addition to these packages, SAP has also released two Cookbooks:
•
•
Integration of SuccessFactors Business Execution into SAP NetWeaver Portal via Single Sign-On
Integration of Multiple SAP ERP Human Capital Management Systems with SuccessFactors
Business Execution
Both of these provide instructions to set up integration of SSO and integration of multiple SAP ERP HCM
systems with SuccessFactors.
Full-Cloud HCM Integration Packages
As mentioned, Dell Boomi AtomSphere is the integration technology used to support integration between
SAP ERP HCM and SuccessFactors Employee Central. Along with the hybrid integration packages, this
integration platform provides full-cloud HCM integration.
SAP has released one integration package for a full-cloud HCM model, the Employee Mini-Master
Integration Package. This was released for Ramp-Up on November 30, 2012, and was released on
general availability on February 15, 2013. This package integrates employee, job, work contract, and
payroll data between SAP ERP HCM and SuccessFactors Employee Central and is also used for
integration between SuccessFactors Employee Central and SAP Cloud Payroll. It leverages the Dell
Boomi AtomSphere platform.
At the time of writing, it is unknown if SAP plans to release further integration packages for a full-cloud
HCM model. However, new integrations are being released on a quarterly basis.
Technical Information and Prerequisites for a Hybrid Integration
Scenario
All the integration packages have the same prerequisites, with the exception of the initial package, which
does not have any middleware prerequisites because it only supports file-based integration.
SAP ECC 6.0 is the minimum release for using the integration packages and there are no enhancement
package prerequisites. For the various Support Package Stack requirements companies should consult
the Administrator’s Guide on SAP Service Marketplace. They should also review SAP Note
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1708986 (Installation of SFIHCM01 600). Within SAP, configuration of the integration packages is done
centrally in the IMG.
For middleware integration using PI, the following minimum prerequisites apply:
•
•
•
SAP NetWeaver PI 7.0
Enterprise Services Repository (ESR) content for the add-on
HTTPS communication
Prerequisites for HCI have not yet been released.
The integration packages are delivered in eight languages: English, German, Spanish, French,
Portuguese, Russian, Chinese, and Japanese. However, the documentation found on SAP Service
Marketplace is largely in English, with some documentation also in German.
Integration Challenges
The pre-delivered integration from SAP is a big step forward for SAP ERP HCM users and provides
benefits to users wishing to use the hybrid approach. Despite this, there are still some challenges
remaining for customers.
SAP has communicated large parts of its strategy, but since this strategy is constantly evolving it has not
been possible to provide full disclosure on a regular basis. SAP has taken the opportunity at major events
to provide updates about their strategy, but many users simply do not have access to or know what
channels to look at for this information. Users should be proactive about trying to stay well informed about
coming changes; this is discussed in more detail in the “So What Does This Mean for SAP ERP HCM
Users?” section.
While users who already have an SAP NetWeaver PI installation in house can benefit immediately from
SAP’s integration packages, those that do not have to invest in an SAP NetWeaver PI implementation
and the associated licensing costs. Those users also have the choice to use HCI, but at present the
licensing costs are unknown and therefore it is difficult to accurately compare the two options. Ideally
users should wait until they have all the information on licensing before examining their options.
Customers using concurrent employment should understand that there is additional maintenance for
employees who have multiple employment contracts. For the integration process to recognize employees
on concurrent employment, the personnel number of the main contract must be maintained in infotype
0712, with subtype SFSF. This acts as a Central Person ID in SuccessFactors. The integration package
report in SAP will then read the Central Person ID and all related personnel numbers, but the personnel
number defined in infotype 0712 is used as the central employee number.
Another consideration is that the email address field is compulsory in SuccessFactors and therefore all
employees must have an email address maintained. Since a BAdI implementation can be used for
determining the email address, it can be possible for organizations to write some ABAP code to generate
this. However, this solution does not work for all organizations.
Key Misconceptions
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Some misconceptions exist around additional licensing for integration. The integration packages are all
license-free and for customers leveraging SAP NetWeaver PI there is no additional licensing required for
middleware integration. For HCI, there are additional licensing costs.
It has also been rumored that much integration content is still required. However, the first integration addon covers all of the basic employee data required for all talent management processes and for the
SuccessFactors Employee Profile that is used in Employee Central and as a central component for talent
management solutions. Module-specific integrations are available for recruiting and compensation but
need to be built for the other solutions.
Other rumors have circulated that more standard integration is crucial for the success of a
SuccessFactors implementation. However, for many customers integration is not a new topic and is not
always a critical aspect of an implementation. In some instances this may be the case, but for some
customers who do not need to transfer data between different systems, integration is not critical.
So, What Does This Mean for SAP ERP HCM Customers?
Based on the previous information I believe that there are certainly a number of ramifications for SAP
ERP HCM customers and, in the long term, the SAP ERP HCM landscape is likely to look very different
than it does today. I believe that on-premise will remain significant for the foreseeable future and SAP
ERP HCM is central to SAP’s hybrid model as the core system of record. In the longer term SAP may
begin to offer Employee Central as the system of record instead of SAP ERP HCM, but at the present
time this should not be of great concern to SAP ERP HCM users as SAP offers both options.
The major changes will come in the talent management area, where SAP is investing significantly in
innovation and integration. Talent management is widely seen as the next era of HCM and numerous
studies have showed a clear correlation between organizational success and a sound talent management
strategy. To support this, SAP has invested in a new wave of talent management applications in its
enhancement package 4, which was released in 2008.
With this in mind, customers should strongly consider that across the suite, SuccessFactors applications
are likely to offer more functionality-rich features than on-premise talent management now and especially
in the future. While it is not true for all the talent management applications in the HCM suite, this is likely
to change as SAP invests further in the HCM suite. The R&D budget available to SuccessFactors has
increased significantly since the acquisition and this drives huge innovation in all of SuccessFactors’
products, not just in talent management. While users should consider this, they should also investigate
each solution’s functionality and integration effort before making a decision. For companies who use a
number of SAP’s talent management solutions already and do not require additional licenses, then
staying with SAP ERP HCM may be the most attractive and practical proposition.
Companies that are using and wish to continue using SAP ERP HCM’s on-premise solution should not be
overly concerned by SAP’s strategy. SAP continues to invest in core HCM and analytics, particularly
around usability and SAP HANA. SAP has made multiple investments in HCM analytics solutions recently
and, I expect, will continue to invest in the technology that can assist customers who wish to invest in
HCM analytics. More recently, SAP announced that the SAP Business Suite is now certified to run on
SAP HANA, which indicates SAP’s commitment to on-premise ERP.
Implementation Considerations
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Companies looking to implement talent management solutions or extend their talent management
portfolio may wish to evaluate their strategic direction to incorporate SaaS. Whether they want to leverage
their on-premise investment or move to the cloud depends on a number of factors. These factors can
include:
•
•
•
•
•
•
•
•
•
•
•
•
Organization culture and readiness for the cloud
Internal SAP strategy and roadmap
Existing customization and enhancements within SAP ERP HCM
Existing investments in talent management or SOVN
Existing infrastructure and technology
Projected maintenance and support costs of extending on-premise usage
Management of capital expenditure versus subscription costs
SAP ERP HCM and SuccessFactors functionality versus business needs and requirements
Level of integration effort between SAP ERP HCM and SuccessFactors
SAP’s strategy, roadmap, and innovation focus areas
Legal restrictions and local legislation
Implementation partners
While there are many reasons why an organization might move to the cloud, I am not going to discuss
them in detail here. However, I examine some of the SuccessFactors-specific factors that companies can
consider.
Functionality
Within SuccessFactors there is, as one would expect, a great deal of overlap across many solutions.
Employee Central is the least mature of SuccessFactors solutions, but SAP has and continues to invest
heavily in bringing it up to the same level of functionality as SAP ERP HCM. Employee Central has now
reached a maturity level where it is fit for enterprise. On the opposite end of the scale, SuccessFactors
Performance and Goals and SuccessFactors Workforce Analytics are two of the most feature-rich
solutions in the HCM suite.
SuccessFactors Performance and Goals contains a number of social and gamification features to ensure
that the performance management process is more attractive to both users and managers. While these
might be considered fluffy features, the core functionality is strong and matches what is offered in the
SAP Performance Management module.
SuccessFactors Recruitment features a standard user interface that far outstrips SAP’s standard offering,
with attractive themes and controls. Although SAP’s recruiting engine – like its performance management
engine – is one of the strongest around, e-Recruiting does lack usability, presentation, and social media
integration. However, SAP e-Recruiting is highly customizable and has a great deal of flexibility. As a
result, companies need to examine whether a trade-off is needed between modern recruitment
techniques and the flexibility that SAP e-Recruiting offers.
SuccessFactors Learning is based on Plateau Systems’ learning management system (LMS), which
SuccessFactors acquired in 2011, and therefore it has a comprehensive set of leading LMS features.
SAP Learning Solution (LSO) is not as strong as the SuccessFactors solution and requires the
additionally licensed SAP Learner Portal and SAP Learning Assistant mobile app to enhance the learning
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experience. SuccessFactors Learning has a strong focus on social-media integration and collaborative
recruiting processes, as well as built-in analytics and complementary mobility functionality. Customers
should investigate if SuccessFactors Learning Solution offers all the functionality found in SAP LSO.
When it comes to compensation management and succession planning, both the on-premise and cloud
solutions have similar features and functionality. For compensation management it is worth evaluating if
ECM is a viable solution if SAP Performance Management is used, since they are used in complementary
processes, have a similar look and feel, and require no additional licensing. Customers should look at
their processes and what key functionality they need to support those processes. This activity will vary
from customer to customer, but should be evaluated thoroughly. The development planning functionality
offered by SAP in SAP NetWeaver Portal is not integrated with other solutions and is fairly rigid, limiting
the value of automated objective setting and measurement of an employee’s long-term development plan.
For workforce planning and for analytics the on-premise solutions from SAP – BusinessObjects Strategic
Workforce Planning and BusinessObjects for HCM Analytics – both rely on BusinessObjects technology,
and both SuccessFactors Workforce Planning and SuccessFactors Workforce Analytics should be
seriously considered irrespective of whether BusinessObjects is running. In particular, SuccessFactors
Workforce Analytics features more than 1,000 predefined analytics and benefits from benchmarks that
are not available in any on-premise solution. For companies that currently don’t have HCM analytics or
SAP NetWeaver Business Warehouse (SAP NetWeaver BW) then it makes sense to look at
SuccessFactors Workforce Analytics.
For social collaboration, SAP Jam is SAP’s go-forward solution, ahead of the existing solution – SAP
StreamWork. Although these solutions share a number of common social-media-related features, SAP
Jam offers more features and its overall usability, despite being similar, could be considered superior to
SAP StreamWork. For example, the layout, user interface design, and social collaboration features in
SAP Jam make it easier and more engaging to use than SAP StreamWork. In addition, some of the
features for Wikis, blogs, and video recording found in SAP Jam certainly bring new benefits to customers
who want to use a social collaboration platform. As a result, new customers seeking a social collaboration
solution should look at SAP Jam rather than SAP StreamWork as the focus of SAP’s innovation
investment has shifted exclusively to SAP Jam.
Integration Considerations
One the biggest areas of concern for SAP users should be around integration. With SuccessFactors, it
appears that SAP has traded integration – one of its biggest selling points – for innovation. SAP has
made integration a key advantage of using its software previously and now it is pushing a solution that
has relatively weak integration when compared to the solutions that have been offered historically. This is
not to say that integration will not get better; on the contrary, SAP is investing significantly in introducing
standard integration scenarios for SAP ERP HCM and SuccessFactors while also providing users with a
foundation to develop their own integration scenarios.
However, in addition to the information provided previously in this report, users must be aware of the
challenges that they may face in creating and maintaining integration between SAP ERP HCM and
SuccessFactors for the hybrid model. At this time, the integration is fairly limited for the hybrid approach
and is restricted to selected talent management processes.
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Integration for full-cloud HCM has existed for some time with Dell Boomi AtomSphere and integration for
SAP Jam is already available. If SAP NetWeaver PI is not implemented then either an implementation of
SAP NetWeaver PI or an implementation of the forthcoming SAP HANA Cloud Integration platform is
required. An implementation of SAP NetWeaver PI would require both a license for PI and the additional
costs of an extended implementation project that could take upwards of six weeks. Interestingly, although
SAP has stated that Boomi AtomSphere should only be used for integration with SuccessFactors
Employee Central, SuccessFactors offers Boomi AtomSphere for integration with all modules. Customers
should first confirm that SAP supports this type of integration method so that there are no integration
surprises at a later date.
In addition to this, customers would also need to design and configure any integration that is not provided
with the SAP standard packages. Depending on the level of customizations within on-premise SAP, this
effort might be considerable and could add more maintenance to what might be an already complex SAP
landscape. On the other hand, should an organization’s talent processes be closer to best practice then
using the standard SAP integration scenarios would be an efficient way of adding SuccessFactors
solutions to their SAP landscape.
Potential users should be advised to monitor SAP’s integration roadmap and releases on a regular basis
to understand whether appropriate content is released from SAP that enables simple and easily
maintainable integration. Once the HCI platform is released and additional details are known, then users
who do not currently have PI can make a better-informed decision about the path they wish to choose for
integration.
One of the impacts that the acquisition has already had on SAP is the change in its release cycle. Like
SuccessFactors, SAP is now releasing new functionality on a quarterly basis with the Feature Packs that
are part of HR Renewal. While all SuccessFactors users have the functionality in the latest release
available to them, SAP users must already have enhancement package 6 and HR Renewal 1.0
implemented to benefit from this new release strategy. Although this quarterly release cycle mirrors that of
SuccessFactors, it is still an open question whether the HR Renewal Feature Packages will deliver the
same number of innovations as is delivered with SuccessFactors.
Core HR
For customers who are looking to revitalize their core HR processes they may want to consider
implementing SuccessFactors Employee Central. Although, at this stage, it is not yet suitable for all
customers it does meet the needs of a significant proportion of customers and it will continue to be
enhanced.
SAP has and continues to invest extensively in the development of Employee Central into the next
generation core HR system. Appointing Thomas Otter from Gartner to oversee the strategy of Employee
Central was a defining move in the future of the product. With a growing roadmap and increasing
integration points customers are advised to look at what Employee Central can offer them, even if they
are unsure whether it can meet their business needs at the present time.
Talent Management Solutions
Companies looking to implement talent management solutions or extend their talent management
portfolio may wish to evaluate their strategic direction to incorporate SaaS. Whether they want to leverage
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their on-premise investment or move to the cloud depends on a number of factors. Since SuccessFactors
is where SAP will invest most of its innovation budget for talent management then companies looking to
implement one or more talent management solutions should take this into consideration along with the
following factors:
•
•
•
•
Existing investments in SAP’s talent management solutions
Functionality of talent management solutions in SAP ERP HCM versus SuccessFactors
Available integration between SAP ERP HCM and SuccessFactors
Planned innovations and mid- to long-term developments
For organizations without any talent management solutions, SuccessFactors is worth considering, despite
the integration concerns. If a phased approach is used for the talent management solutions in
SuccessFactors then in due course it is likely that SAP will deliver integration scenarios to cover the
solutions that are not yet implemented.
Companies with existing talent management solutions must consider whether moving to the cloud is
suitable for the new processes. Since SAP’s talent management solutions are designed to be integrated
processes, it might not make sense to move one or two internal processes to SuccessFactors while
keeping others on SAP ERP HCM. In some cases, there might not be additional functionality in
SuccessFactors than is found in SAP ERP HCM. SAP ECM has a number of similarities with
SuccessFactors Compensation and therefore an investment in additional licenses might not warrant a
return on investment versus the cost of implementing ECM, especially since there are no additional
licenses for using ECM. Users might also find that SAP ERP HCM can deliver all the functionality that
they require.
Customers should examine their existing talent management landscape, the functionality within
SuccessFactors versus SAP ERP HCM, and whether there is a significant return on investment in
purchasing licenses for SuccessFactors versus the additional functionality and adoption that would be
obtained.
Legal Restrictions and Data Protection
Despite strong data protection laws that exist, some companies in some territories may have legal
restrictions or a lack of legal protection for their data. As the digital age outgrows legislation that was put
in place in the past, some organizations may face restrictions from moving to the cloud that may exist until
up-to-date legislation is brought into law within their territory or region. Organizations should make sure
they are fully aware of the legal implications of their data.
SuccessFactors does have strong data protection mechanisms, policies, and standards for protection of
data. Their data centers are located in various territories that afford solid protection for customer data and
can protect against unauthorized parties accessing data. For most companies there are unlikely to be any
repercussions of moving to the cloud. However, companies must ensure that they do their homework.
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