Monday, December 23, 2013

The SAP SuccessFactors Advantage For Full Cloud HCM Customers

When SAP customers move all their human capital management applications to the cloud, they might wonder about the advantage of going with SuccessFactors.

First of all, integrating HR applications with business applications has proven to be a big advantage. In fact an SAP study found out that revenue per employee increases 40% when HR applications are connected with business applications. So even when HR applications move to the cloud, it is absolutely essential to connect them to systems that run the business to stay competitive.

Second, my colleagues and I are making changes to both ends of the software while building integrations between SAP and SuccessFactors. While building an integration, if we think changing the cloud software or the on-premise ERP software a bit significantly simplifies the integration and reduces cost for customers, we get together for a coffee (It sometimes turns out to be a very expensive coffee because, one of us flies to Walldorf or South San Francisco) and persuade the product manager to consider making changes to the software. I found out that it is hard to say no to someone who flies 9000 miles to ask you for your help.

Other cloud vendors cannot do this. Instead, they (or their implementation partners) try to build an integration within the constraints of the software. I do not blame them. I would do the same if  I were in their shoes and were operating with the constraints they have.

While both types of integrations might look similar in the beginning, the cost of maintaining the integrations, provided by cloud-only vendors, with every software upgrade will add to millions of dollars. It is a bit like the difference between driving a car that gives you 20 miles per gallon and one that gives you 40 miles per gallon. You may not notice the difference when you buy the car, but the first car will cost you a lot more money to operate.

Every time such maintenance is done, it is time and money away from other productive activities. Every maintenance missed is a significant business risk. Every integration not done to avoid these problems is opportunity lost and eroded competitive advantage.

Here is a picture I put together to convey this advantage.

Is that the only advantage of going with SuccessFactors for your cloud applications? Of course not. There are more. I will be talking about the other advantages and inviting sales colleagues who have successfully articulated these advantages to customers to the stage at FKOM in Las Vegas. I look forward to seeing you there, if you are going.

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