Analyst Perspectives

Much has happened for SuccessFactors in the past year as it became more a part of SAP, which acquired it in 2012.  One of the most notable changes was the departure of its founder, Lars Delgaard, who set the culture of the company, and the selection of Shawn Price as president. The changes in leadership have come as SuccessFactors shifts away from its position in “business execution” software toward a HR and talent management suite, which aligns it more with what SAP has. (For background, see my colleague Mark Smith’s report shortly after the acquisition.) Since then, SuccessFactors and SAP have worked at strengthening several parts of their human capital management product by connecting it with its new payroll software and more recently its HANA in-memory processing platform. The products, however, remain separate. These advances should be well received by both existing customers and those considering either its new payroll system or SuccessFactors’ HR management and talent management systems.

The biggest announcement of this kind was made at the 2013 SuccessConnect event in October, where Price revealed that SuccessFactors applications will be running on SAP HANA, which now runs almost all of SAP’s enterprise applications. Mark wrote about SAP HANA following the 2013 SAP SAPPHIRE conference. Since the SuccessConnect event, SuccessFactors has made some progress toward putting the release into production. Specifically, as of the release SuccessFactors designates August 1308, its Talent suite has been tested on HANA and is now available to beta customers. The company plans soon to launch its workforce analytics product on HANA as well.

In addition Employee Central, SuccessFactors’ HR management product, and SAP payroll products now work together more. As most HR management systems are well established, Employee Central is a relative newcomer, and SuccessFactors has continued to enhance the product over the year or so it has been on the market. The simplicity and user experience of Employee Central is worth seeing how the face to applications and information is changing for SAP. While users of SAP Payroll still have to perform many activities in the older standard SAP user interface, Employee Central users can handle some common payroll tasks directly within the more intuitive Employee Central interface. That said, this is probably where some of the greatest complexity lies in integrating SAP and SuccessFactors applications. Although there is a shipping product that is somewhat integrated, I still advise due diligence for customers, which often have complex and custom requirements for both HR and payroll functions. Making sure you understand how the application addresses configuration requirements in the new integrated environment is important to a successful implementation.

It is noteworthy that Employee Central includes the Workforce Analytics product. This is one of the best HR analytics offerings on the market today because of its usability. Unlike many analytics systems, which provide dashboards with visualization or metrics in a report and then leave it to the user to understand much of the data, the SuccessFactors analytics product provides a plain English interpretation of many of the results it shows and includes an interpretation guide within the system to help users understand common HR terms and the purpose of the analysis. It was so forward thinking that it won the 2012 Ventana Research Technology Innovation Award for overall business innovation. Our benchmark research on next-generation business intelligence shows that the most important technology consideration is usability, which more than three out of five participants (63%) selected, and SuccessFactors offers that.

SAP Jam is another product that has been tied into SuccessFactors’ HCM suite and thereby advanced its business collaboration capabilities. SuccessFactors has worked to develop collaboration capabilities of SAP Jam and expose those capabilities to other products within the SuccessFactors suite, most notably Employee Central and Learning Management. In both of these cases, several collaboration features from Jam are embedded within the products, making social collaboration stronger for both the suite and the core SAP Jam. Picking core HR Management and Learning Management as the initial integration points for SAP Jam matches well to our benchmark research on social media and HCM, which shows that knowledge sharing and learning are among the top five goals of social collaboration.

One area in which SuccessFactors and SAP both are lacking is a competitive workforce management product. However, last year they filled the gap by announcing a partnership with Kronos to integrate its Workforce Central product. Our 2014 Workforce Management Value Index provides in-depth reviews and comparisons of the vendors and products in the workforce management market, and I recommend consulting it to see how SAP shapes up.

As SuccessFactors continues the process of migrating into SAP, it has strong products in many segments of HCM, though the messaging it now uses to describe their value seems to less aggressive than before. However, its completed and planned integrations as well as the recent Kronos partnership strengthen its position in the HCM market. As 2014 gets under way, we will get into the details of several SuccessFactors products, with a more in-depth look at its compensation management, analytics and payroll products as we launch Value Indexes in each of these areas. SuccessFactors’ improvements over the past year are worth checking out as you look to determine what HCM systems will work best for your specific needs.

Regards,

Ventana Research