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Any doubts that HCM applications are in vogue were put to rest when Oracle announced it would acquire Taleo, which sells cloud-based talent management and recruitment software, last week. Meanwhile, SAP is working to close a deal with SuccessFactors, and Salesforce.com has its Rypple acquisition.
HCM is, well, hot.
What are SAP’s plans for its HCM customers this year? SAP’s David Ludlow, who is Group Vice President, Line of Business – HR, discussed some areas that SAP will focus on in a recent interview.
SuccessFactors Integration—Functional and Technical—Is a Main Priority. There is nothing in the HR application space that isn’t eligible for the cloud, Ludlow says. But while SAP sees an increasing move toward customers wanting all HCM functionality in the cloud, there are of course the thousands of customers that run SAP’s on-premise HCM applications.
From a functional perspective, Ludlow says he thinks there is 100 percent overlap between SAP and SuccessFactors. But from a deployment method, there is zero overlap. With the exception of some parts of its learning software (Plateau), everything SuccessFactors sells is on-demand. Everything from SAP in the HCM space right now is on-premise. And Ludlow expects it to remain that way—SAP will continue to enhance the existing on-premise suite and sell SuccessFactors software to augment that functionality in the cloud.
There is, in reality, another area of overlap in Career OnDemand, a SaaS talent management application SAP’s been developing. Further development has been stopped at this point, pending the acquisition, Ludlow says. Development has continued on what was planned in the “first wave” with customers participating through SAP’s co-innovation program. If SAP decides not to develop that application any further once the acquisition goes through, it will take the learning and the content from work with those customers and incorporate it into other software.
“We’ve learned a tremendous amount,” Ludlow says. “In the event [Career OnDemand] is not taken forward, we want to leverage as much of that as possible.”
How SAP will ease the technical integration of the on-demand applications from SuccessFactors and its on-premise systems is, naturally, the million-dollar question.
While he said he was “restricted” as to what he could say because the acquisition is still pending, Ludlow does say: “We see this as a high priority, and some of the communication we’ll provide on day one when the acquisition is finalized.”
HR Mobile Apps to Focus on Process and Role. In October 2011, SAP started selling six mobile HR applications. These were developed by identifying the key stakeholders of the application and the process, Ludlow says. SAP looked at scenarios that an employee or manager would use the most, and how to get the highest value from that process on a mobile device.
“We made the decision not to take the entire ESS [software portfolio] and shove it out to someone on a tablet device,” Ludlow says. “We chopped everything into little bite-size pieces.”
For instance, a “leave request” is one application: a user clicks on the icon on his device, gets his vacation balance, can see the team calendar requests for vacation, and can request vacation himself – all of which is integrated with the back-end SAP system. There’s also applications for employee look-up, time-sheeting and e-recruiting, which allows hiring managers to see a quick view of applicants’ resumes or any notes made by the recruiter.
HR Analytics Are Coming. There isn’t a situation in which HR will ever be viewed as a profit center, but HR is moving from being just the personnel department to becoming more of a business partner, a move Ludlow says has been facilitated through technology. Globalization, for instance, plays a huge role in how HR will support the business going forward, in terms of ensuring compliance with local laws, labor contracts and regulation.
HR, then, faces a new challenge.
“I think HR also needs to step up to the plate,” Ludlow says. “It needs to understand more of how the business runs, what the strategy of the business is and how I can support it?”
On that note, he says there is a “woeful lack” of heavy usage of analytics in HR. There can be hundreds of transactions per employee—say, movement, promotion and salary changes. If businesses can mine that information to find out who the high performers are, that’s where they can find some of the silver bullets.
HCM users can look forward to more content packages from SAP to get them started with HR analytics through Rapid Deployment Solutions for sale; those will come in the second and third quarters of this year, Ludlow says. For instance, SAP is building out HR content for SAP BusinessObjects Planning and Consolidation (known better as SAP BPC), a tool for budgeting and planning for the finance department. It plans to sell the tool to help customers with headcount planning.