Thursday, March 27, 2014

The Document Is In My Jam Page

I had to step in for David Ludlow last week for an executive presentation on SAP and SuccessFactors solutions. I have done this multiple times in the past and I have used David's solution presentations. This time when he suggested that I present to this group of executives from a US chemical company, I asked David for his HR Insider 2014 Keynote presentation. Usually David sends it via email, puts it in a folder or sends it via an internal file transfer system called SAPMATs. This time however he replied and said that that presentation is in his Jam page. He did not have to say anything more. I knew where to find it.

This is an interesting turn of events. David and many other colleagues have started posting content such as our key presentations to our SAP Jam profile pages so that anyone in the company can access those assets. The key thing here is that content is attached to a person rather than the other way around. A nice example of people-centric design.

SAP Jam documents are associated with a person's profile.

Editing In SharePoint Vs Editing In SAP Jam

At SAP we use both SharePoint and SAP Jam. SharePoint is used by the SuccessFactors product marketing teams to post content for field colleagues and partners. SAP Jam is used for sharing and conversations. Editing is SharePoint is very different from editing a page on Jam. Jam editing is WYSIWYG where as editing in SharePoint, while very strctured and robust, is not WYSIWYG.

WYSIWSG matters a lot for user engagement. I noticed that many of my colleagues just do the essential in SharePoint because it feels a bit like configuring a system rather than editing a page. SAP Jam on the other hand makes editing more like editing a document and thus improves user engagement. In fact it is so easy to set up an SAP Jam group for a topic that Jam groups are proliferating like rabbits everywhere. Sometimes I think there should a limit on the number of Jam groups a person is allowed to create.

The Edit screen in Jam feels like editing a Word document

Thursday, March 20, 2014

IT Teams Play An Important Role In Procurement Of Cloud Software

I had a chance to talk to a group of new sales hires at SAP yesterday. One of them was Jeffrey Hutchinson, the former CIO of Maple Leaf Foods. Jeffrey was kind enough to share the perspective of the CIO and his or her role while an organization moves to the cloud.

He pointed out that while it was easier for the business to buy single cloud applications without the help of IT teams, it is not so simple to buy a more crucial application such as employee administration without the help of the IT team. I was discussing this with David Ludlow, the head of HCM solutions at SAP today and he pointed out that IT teams are more experienced in evaluating and buying business software compared to the business. While business teams evaluate functionality , IT teams are experienced in evaluation many aspects of business software such as total cost, security, integration, data migration and analytics.

I found out there are SAP customers who went ahead and bought critical cloud solutions without involving the IT team and could not implement it due to the lack of support from the IT team. Without the support of the IT team, they could not secure an implementation budget from the CFO.

As business critical applications move to the cloud, procurement of cloud software is certainly starting to look a bit more like procurement of on-premise software.

Wednesday, March 19, 2014

Ingredients And The Chef Make a Good Entree. The Oven Just Helps

Yesterday while I was discussing a customer's Journey to the Cloud with their HR IT team.  That customer, who has integrated their HR systems with about 20 business systems, pointed this out to me that the design of the integration and the content mapping are far more important than the middleware technology that handles the integrations. Middleware technology for an integration designer is like an oven for a chef. It is required and has to do its job. But it is not the main reason an integration brings value or causes problems.

Integrations do not normally fail because of middleware technology
An integration between two systems, say system A and system B,  might fail when one of the following things happen. It could break when System A was updated and some integration points do not send or receive the necessary information. It could break because System B was updated and some integration points do not send or receive the necessary information. The integration between two systems rarely break because the middleware technology handling the integration went through some change.

Lack of attention from project team is the main cause for failure
Integration also becomes an issue when project teams do not pay attention to it or do not keep time and money aside to address it. Unfortunately, software vendors sometimes mislead customers by saying either integration is not necessary or is so simple that they do not have to worry about it. In some cases vendors show a tool and say that the tool will solve all the integration problems. It is a bit like showing an oven to a group of aspiring chefs and saying that the oven is all they need to make great food.

I have been pointing this out to customers and have been urging them to pay more attention to integration content and the business value it brings for them. I have also been urging customers to keep time, money and more importantly mind share aside for the topic of integration for over a year now.

This has started paying off. Those customers who planned to address integration early in their projects completed their projects will a lot less stress compared to the ones that did not.

Wednesday, March 12, 2014

Cameco Corporation's Journey To The Cloud

Yesterday at HR Insider 2014 I told the story of an SAP customer's journey to the cloud and talked about how the HCM deployment models and the pre-packaged integrations acted as a guide in their journey to the cloud. Colleagues from Cameco were in the audience and they recognized that I was telling their story. At dinner later they were kind enough to give me permission to mention their name as the company that inspired my story.

I believe that the team at Cameco is a pioneer when it comes to taking a deliberate, systematic, low risk, cost effective approach to moving human capital management to the cloud and a role model for all SAP HCM customers.

This is the first screen where I introduced the main characters in the story.

They first deployed the Talent Solutions module and a year later moved to the Full Cloud HCM model by also moving Employee Administration the cloud.

Tuesday, March 04, 2014

Power Generation Is Going On-Premise In Germany

While computing is moving to the cloud rapidly, some brick and mortar operations such as electricity generations are moving on-premise. For example, in Germany one in 6 companies generate their own power on-premise. An Interesting trend.

Journey to the SuccessFactors cloud for SAP Consultants

This week, I am speaking at the Innovation Days conference organized by the SAP Consulting organization along with my colleague Chinni Reddygari, who heads technical professional services for SuccessFactors. I usually spend time helping SAP customers plan their journey to the cloud. This week however is dedicated to helping my colleagues in SAP consulting understand the opportunities they have in the SuccessFactors cloud and get trained in areas where they need to develop new skills. These are the four main things I plan to tell them.

This is the pencil sketch I drew, while preparing for this session.

Sunday, March 02, 2014

Why Every SAP Employee Should Participate In The Employee Share Matching Plan

SAP has an employee share matching plan. There is nothing secret about it. Depending upon our basic pay, we get to buy a certain number of SAP shares at a 40 percent discount. After we keep the shares for three years we get a bonus share for every three shares. This is available for all employees with very few restrictions like interns and new hires who joined less than a year from the plan date. This is a good reward.

To my surprise, I found that some of my colleagues chose not to invest in this for some reason. So I decided to elaborate on why I decided to participate in this plan. In fact, SAP shares are the only individual company shares I own. I otherwise invest in index funds whose management expenses are less than 0.5 percent.

I started by asking myself if Warren Buffet, the greatest investor on earth, would participate in the SAP Share Matching Plan if he has a chance. After some analysis, I concluded that he would if he has a chance. Let me explain why.

Lets's say an employee has a chance to buy 60 shares. The cost of those 60 shares at today's price of $80 a share will be be about $4800. Since an employee get the shares at 40 percent discount the cost after the 40 percent discount is about $2800. After 3 years the employee will get a free match of one share for every three shares. So the employee will get an additional 20 shares. The value of those 20 shares will be about $1600. I am assuming that the price does not change much for purposes of calculation. So the real cost of the 60 shares for the employee is about $1280. This means the total discount is not 40 percent. It is about 73 percent. At a 73 percent discount the cost per share for the employee is about $21.

So we are getting a share at 73 percent discount. One might wonder if the share is so much over priced today that even a 73 percent discount may not be worth it. That is where the price to earnings ratio comes into picture. Rather than consider the estimated price to earnings ratio for 2014, let us take the more conservative approach and consider the actual price to earnings ratio of 2013. In 2013 SAP's earning per share was $ 3.8. So the price to earnings ratio based on the 2013 earnings per share and the current stock price of $80 is 20.67. However, the employee is only paying a price of $21 for the share. So the real price to earnings ratio for the employee is 5.5.

Warren Buffet, the greatest investor on earth and his mentor Benjamin Graham, the father of value investing, consider any price to earnings ratio less than 15 as reasonable. At a price to earnings ratio of 5, I think they would have participated happily in the SAP Employee Share Matching Plan, had they had a chance.

Here is my excel sheet with my analysis i discussed above. If you disagree or find a flaw in my thinking, please let me know. This year there might be another round and I would like to be prepared.

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