It has been another very eventful year in HR Technology and last year at this time, a group of friends and I collaborated to write The Future of SAP HCM and SuccessFactors Consulting - 2015. This year we split the report into a three-part series with the recently released Future of SAP HCM On Premise Consulting – 2016 (Part 1)and Future of SuccessFactors Consulting – Talent Management (Part 3) planned to be released in two weeks.

I have no doubt we are we are still in the early innings of the multi year shift from client server OnPremise software (i.e. SAP HCM, Oracle EBS, PeopleSoft) to the next generation cloud based offerings (i.e. SuccessFactors, Workday, Oracle HCM Cloud) which Bill Kutik has done a great job of outlining in this article. SAP has been very aggressive over the past 5 years spending over 17 billion on acquiring cloud companies such as SuccessFactors, Ariba, Fieldglass and Concur and is now predicting that cloud and support revenue will overtake software by 2018.

Given that, it should come as no surprise that SAP is leading with SuccessFactors HCM Suite for all new customers, in most regions worldwide. There has always been a delicate balance within the SAP HCM Consulting market and this major shift over the last few years of HR customers moving to the cloud (with SuccessFactors and to competitors) has had a huge impact on the traditional SAP HCM consulting market. In the SAP HCM market, I am seeing a very little opportunity, billable rate compression, layoffs and it is not a place you want to be longer term.

On the flip side virtually every consulting company is looking to add experienced SuccessFactors resources as well as re-train and their existing consultants on new technology. This was one of the reasons we recorded “Becoming and HCM SaaS Consultant and followed it up with “Becoming a SuccessFactors Consultant” with fellow SAP Mentor Alumni Jon Reed and Luke Marson to help people with the transition. For any customers reading this, the SuccessFactors consulting world is VERY different than the SAP consulting world and would high recommending watching the video below.



While there will continue to be some very small pockets of strength in the SAP HCM market in various regions and modules, the combination of the product roadmap being squarely focused on SuccessFactors, SAP sales teams leading with the Cloud (for HR), continued off-shoring, faster implementations, the buzz for cloud based HR technology and serious competitive threats from Workday, Oracle Fusion and others guarantee the OnPremise SAP HCM consulting market will continue its downward spiral.

I decided to reach out to a diverse group of individuals that I personally know and trust would give an honest opinion of what they are seeing on the ground in their respective areas. They include SAP HCM and SuccessFactors Industry Experts, SAP Mentors, SAP Press Authors, HR Expert authors, well-known conference speakers and some of the most knowledgeable individuals I know in the industry. Here are their thoughts.


SuccessFactors Project Management

I reached out to Steve Bogner who is Managing Partner at Insight Consulting Partners a fellow SAP Mentor, maestro of the great HCM Podcast Group and he told me:

Sound advice for SAP HCM and SuccessFactors HCM project management is much the same as a year ago. The technical landscape is changing rapidly, so be sure to keep an eye on that as you plan your roadmap and implementation. Integration is still a key part of projects, with more moving to HANA Cloud Integration (HCI). Consultancies are racing to build their practices and win implementations, keeping us in a Wild West environment for now. Address this by being selective with the consultancies and consultants you bring in to your projects, and perhaps by hiring a third-party, independent consultant as an advisor.

As you plan projects it is ever more critical to have good, solid buy-in and ownership from each business area impacted. In fact, if the business areas - HR, Benefits, Payroll, etc - are not willing to allocate resources and leadership then it might not be the right time to start critical projects. And also remember that IT resources are still needed! There is integration work, understanding legacy systems, and system architecture issues (and more) to deal with in the cloud.

SuccessFactors Employee Central

I reached out to Luke Marson, who is a Certified Professional in Employee Central, has worked with over 15 SuccessFactors customers ranging from 750 to 105,000 employees, co-author of the SAP PRESS books "SuccessFactors with SAP ERP HCM" and “SuccessFactors Employee Central: The Comprehensive Guide, runs the SuccessFactors business at Hula Partners and delivers Employee Central and integration implementations, optimization, strategy, roadmapping, assessment, and advisory who told me:

2015 was really the year that Employee Central took off. SAP sold their 1,000th subscription for Employee Central and a number of large global customers went live. Employee Central continued to mature, with enhancements to existing features (such as time management and workflows) and introduction of new features (such as document generation and contingent workforce management). The integration offerings have increased significantly in terms of SAP integration capabilities (i.e. CATS, GRC, Fieldglass, etc.) and technology (SAP HANA Cloud Integration (HCI) is now available for new customers).

In terms of the consulting market, there has been a surge in demand for quality resources (also in areas such as Recruiting and Onboarding). Although there are a limited number of experience consultants compared to other modules, customers should still be easily able to find consultants that have Professional Certification to lead their implementation. However, some customers are still not doing their due diligence or are hiring brand names without understanding who will actually deliver the implementation. As a result, there have been several customers who have struggled with their implementation or who have needed help afterwards to fix their botched implementations.

The maturity of the product is no longer a question and large enterprises are actively implementing or have gone live with Employee Central. Only recently was I lucky enough to begin working with one of the largest oilfield services firm in the world, who has over 105,000 employees across more than 40 countries. They are currently rolling out Employee Central over the next 18 months while integrating back to SAP ERP, which goes to show that even large, complex, global organizations are able to leverage Employee Central for their HR needs. And every quarter last year, SAP signed a new record sized customer for Employee Central. SAP’s top five Employee Central customers in terms of employees employee over 1.3 million people and are headquartered in 4 different continents.

In 2016, I expect to see more and more consultants obtaining both Associate Certification as well as Professional Certification in Employee Central, as more consultants continue to gain further experience due to the rapid growth of Employee Central. Many firms have still not delivered many Employee Central implementations or have delivered them at smaller customers, meaning that customers really need to look around at the ecosystem and do their due diligence to avoid getting burned. Customers can learn a few more tricks in this interview on Firing Line with Bill Kutik that features Jarret Pazahanick and myself.

From a product perspective, there will be a lot more ongoing enhancements to People Profile, Contingent Workforce Management, Time Management, cross-suite integration, and more. Additionally, Platform features like Integration Center, Intelligent Services, and Metadata Framework (MDF) continue to strengthen EC and the other SuccessFactors HCM suite applications. I fully expect to see more partner-built SuccessFactors extensions on the SAP HANA Cloud Platform (HCP).

2016 should also see a large growth year in the EMEA market, now that Employee Central is a proven global HR system for companies of all sizes. Additionally, I expect Employee Central to overtake Workday in terms of number of customers during the first half of 2016, which will be a real coup for SAP. Currently Employee Central is under 100 customers behind Workday, despite being a significantly younger product. This is largely down to the strategy put in place by Thomas Otter, Dmitri Krakovsky, and Mike Ettling over the last 3 years, as well as the teams working with them.

Overall, it will be onwards and upwards in 2016.

SuccessFactors Employee Central Payroll

I reached out to Jarret Pazahanick who is Managing Partner at EIC Experts, an SAP Mentor Alumni and has been part of 20+ SAP Payroll and SuccessFactors Employee Central Payroll implementations and he told me (couldn’t resist a formal intro)


There are currently 68 Employee Central Payroll customers and 911,000 users out of the roughly 1000 Employee Central customers. It is important to note that the foundation of this product is SAP Payroll (hosted by SAP) with vendor delivered bi- directional integration with Employee Central and is available for the following countries as of 1602, Argentina, Australia, Austria, Brazil, Canada, Chile, China, Colombia, Czech Republic, Finland, France, Germany, Hong Kong, India, Ireland, Italy, Japan, Malaysia, Mexico, Netherlands, New Zealand, Russia, Saudi Arabia, Singapore, Spain, South Korea, Sweden, Switzerland, Taiwan, UAE, UK, USA and Venezuela.

The preferred s**** set customers should be looking for to help them with their Employee Central payroll implementation is different than it is in SAP Payroll as consultants need to be familiar with Employee Central and ideally certified in that offering. My recommendation is customers be very diligent to ensure their consulting resources have the necessary ECP experience before moving forward with their implementation and although it is almost 5 years old here are Seven Tips to ensure you hire the Right Consultant.

Some good news for ECP customers is that the Payroll Control Center has been delivered as part of the 1411 offering so customers will not have to worry about being on the right technology stack (SAP takes care of that) but you will want to ensure your consultant has experience implementing the Control Center and ECP (very few do). My understanding is that over time Employee Central Payroll will continue to add functionality that differentiates it from SAP Payroll as it has with functionality such as BSI Tax Updates, BSI eForms plus several items on the roadmap

Platform

I reached out to Luke Marson, who is a Certified Professional in Employee Central, has worked with over 15 SuccessFactors customers ranging from 750 to 105,000 employees, co-author of the SAP PRESS books "SuccessFactors with SAP ERP HCM" and “SuccessFactors Employee Central: The Comprehensive Guide who told me:

SAP has continued their innovation with the SAP SuccessFactors Platform this year. Intelligent Services, Integration Center, People Profile, and Next Gen Admin are just some of the areas where SAP has made a serious investment in new capabilities. The People Profile UI is slick and is part of a larger user experience strategy that SAP hopes will unify all of their cloud and on-premise solutions from a user interface and user experience perspectives. Intelligent Services enables system events to push out notifications and integrations within and outside of the SAP SuccessFactors HCM suite.

Continued investment in Metadata Framework (MDF), rules engine, and the OData API has enabled further functionality to be rolled out and continues to be the framework on which new functionality is built. The forthcoming Extensions Center will take this one step further with a central place to manage and build extensions. MDF has really become a staple of every EC consultant, rather than being a differentiator as it has been in the past. Although not used extensively across the talent applications, plans are afoot to move Recruiting and Onboarding onto MDF to unify the hire-to-retire data model and therefore enhance processes, data flows, and opportunities for customers.

SAP has also stepped up with their documentation, meaning implementation consultants have a wealth of documentation online to understand how new and existing functionality works. This is helping to level the playing field and meaning that consultants focused in specific areas can understand these capabilities. I expect the smarter SuccessFactors consultants to understand more than just the immediate features and functionality of their core area and to understand the Platform and other integration points that are part of the suite.

Workforce Analytics

I spoke with Doug Rippey, a 15-year HR Analytics veteran who leads Aasonn’s analytics and reporting, who told me:

When discussing SuccessFactors’ Reporting and Analytics, it’s important to understand the delineation between the two. Reporting consists of the tools used to get transactional data out of the various modules in a near real-time environment; Analytics provides strategic guidance based on monthly data points and trends over time. Unfortunately, most organizations’ approach to reporting is as an afterthought rather than crafting a cross-module reporting strategy at the beginning of an implementation. SuccessFactors’ variety of reporting tools: Dashboards, Ad Hoc, Online Report Designer (ORD) and some module-specific tools mean clients find it difficult to know which tool should be used for what and how they all interrelate. Different functionality (and a different interface) between ORD queries for the talent modules versus EC has added additional confusion.

The good news is that SuccessFactors has invested in closing functionality gaps and is continuing to enhance the reporting tools in 2016. With each quarterly release, the team addresses many of the faults that had been identified in Dashboards 2.0 that prevented some migrating from the old Dashboards. Advanced Reporting (the new EC version of the ORD query tool) has provided additional/easier functionality around change reporting and field aggregation. Many more enhancements that have been identified through the customer community are now on the reporting roadmap.

For the Workforce Analytics and Planning (WFAP) modules, SuccessFactors faces competition from new point solution vendors as well as its traditional HCM competitors. Many of the point solutions have sprung from companies who understand analytics/”big data” and are trying to move into the HR market. SuccessFactors is investing to stay ahead and compete effectively in this market. Its latest updates include additional analytics dashboards focused on diversity and inclusion. Ongoing investment into Analytics in 2016 is designed to provide deeper insight cross-module and help leaders with data-driven decision-making.

Finally, as the talent modules mature and EC continues its rampant growth, the demand to get useful data out of the SuccessFactors suite had outpaced supply of knowledgeable consultants in the reporting and analytics areas. I see this shortage lasting at least through the short term, until new resources can ramp up to meet this exponential demand.

Concur

I spoke with Sven Ringling who is the UK director of iProCon, a small consultancy based in the UK and in Germany and recently his firm became a Concur Partner who told me:

Concur’s first year in the SAP family has seen a lot activity and interest from customers, though not too much of that translated into completed implementations yet. The whole Concur market (only T&E, ignoring Concur Invoice) can be split along 2 lines:


    1. America vs. Europe


      • As a world market leader Concur had several well established markets, most notably in North America. The SAP acquisition has added some momentum there, but it’s a far less significant change then other markets see. However, I do expect solution improvements driven by Europe to positively impact established markets, too.
      • With few exceptions, Concur was an “also ran” in 2014 Europe. This has changed dramatically. There are already many new implementations. With Concur doing their homework on SAP integration, European legal requirements and practice, stability, and a much wider mobile scope, I expect many more.


2) Travel vs. Expense

      • Expense is the natural starting point and what most customers have in SAP. Concur’s big differentiators are mobile, receipt handling, and analytics, but some customers still prefer SAP’s backend processes.
      • The real game changer is Travel, bringing a fully integrated process. Customers are still more cautious here.


Impacts on consultancy:

Concur already struggles with implementation workload, especially in Europe, and they are also aware customers demand more than purely technical deployment. They responded with the new partnership program, where consultants, who understand Concur configuration, but help with strategy, process, integration, and transformation, will be in high demand. The surge will hit Europe, most notably Germany, first, but spill into other regions due to the improvements mentioned. Mid-term, I expect Concur to change their partner model to allow partner managed implementations.
An interesting bit are large service providers, T&E processes are outsourced to. Some translate their models into Concur already, but to me it seems to become obsolete with cloud solutions like Concur. Much more effective to keep the process inside, decentralize as much as possible, and add individual services such as receipt audit or VAT reclaim as needed. With more customers picking up “Travel” some strategic consultancy will be in demand here.


Wrap Up

There is an excellent quote from Naomi Bloom who is a HR Technology thought leader that I like to share every year as I find it very relevant.

"Consultants, at least in my world view, are individuals who are able to study a business problem and, regardless of any particular technology choices, guide the client to the best possible approach to achieving the desired business results."

At the end of the day, if you are a consultant that is able to provide that type of value for your customers then it won't matter the HR technology, you will be have the head start at being successful. That said, it is very important whether you are a customer or consultant, that you are aware of where the technology is headed and in HR the future is the cloud. If you trying to break into HR Technology I don’t see any scenario where learning SAP HCM as a “fresher” in 2016 and beyond is going to serve you well in the long run.

I am a big believer that being a lifelong learner is a key competitive advantage given the rapid pace of change in HR Technology, and in order to stay current on all the major news and developments I would recommend joining the 26,000+ people in my Global SAP and SuccessFactors and Global SAP HCM and SuccessFactors groups.

Would love to get your comments, questions to the authors, and your individual point of view.



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