Weighing the pros and cons of moving to the SuccessFactors HCM suite cloud can be tough for many customers, not to mention justifying implementation despite some of the obvious benefits of using best-of-breed, 21st-century-designed Human Capital Management (HCM) enterprise software.
Here are some key reasons why you may or may not choose to move your HR process technology into the cloud.
It's all about process
One of the first things to realize is that SuccessFactors is only an enabler to your HR processes. Understanding where you are and your vision for HR is crucial in leveraging any enterprise software. Implementing SuccessFactors is a great opportunity to revisit your business processes and reinvigorate your HR business with software designed to make this simple, modern and effective.
The Millennials are coming!
By 2020, around 50% of the workforce will be Millennials and this demographic brings different requirements and expectations to organizations and to HR executives. Of course, nobody ever left a company because their HR system sucked, but can you afford not to have a system of engagement versus a system of record? SuccessFactors was designed on very different principles than your 20-year-old SAP ERP HCM system, and SuccessFactors has even reinvented itself to keep up with the times. Of course, if you have very complex processes and HRIS requirements, then SuccessFactors might not be for you right now.
The hardest part of a SuccessFactors project is the process design and change management. The iterative configuration and deployment is much quicker with SuccessFactors than with traditional on-premises software. With more limited choices (i.e., no customization), organizations can stick to tried-and-tested processes and remove unnecessary and unwieldy customized systems. This enables a much shorter and value-added implementation.
That being said, proper readiness assessment, change management, and business resources can mean that a project might not necessarily be delivered more quickly than an on-premise project. Although the design and configuration phases of a SuccessFactors project are significantly reduced, having adequate resources available for testing, training, integration, and change management may extend the duration of a project.
Control and flexibility
Because SuccessFactors cannot be customized, the system can remain stable, upgradable and maintainable. However, until recently this rigidity was a problem for some customers. SAP's answer is extensibility: custom objects using the Metadata Framework and custom applications using the SAP HANA Cloud Platform. The latter gives customers the ability to create brand new applications that seamlessly sit within SuccessFactors; they adopt the theme, can be accessed from the menu and leverage the data in the system. This offers the best of both worlds: custom applications and objects without customization or coding in the SuccessFactors system.
SuccessFactors updates its software four times a year, which can be both exciting and overwhelming. New features and functions are delivered at a speed that can be difficult to digest. Depending on the type of organization you are, this is either a value-add or a hindrance. Many existing SuccessFactors customers perform mini re-implementations every couple of years where they look at the new features released since their last implementation went live because it is simply difficult to keep track of and understand all the features as they are rolled out. Since many features are opt-in, customers can more easily handle the innovations and introduce them when it suits them. This does, however, bring the risk that many new features are never utilized, as is the case with some of SAP's Enhancement Packages.
One of the major benefits that SuccessFactors has over SAP ERP HCM is that it is extremely user-friendly. The user experience is significantly enhanced, and subtle features can make using it a joy for users that have experienced using the SAP GUI or SAP NetWeaver Portal.
Unlike SAP on-premises HCM software, mobility is included as part of the SuccessFactors license, which removes costly and complex barriers to entry. The SuccessFactors Mobile platform is rich with functionality in areas such as recruiting, to-do list management, and performance and goal management. Although Android and Blackberry applications are not up to par with the Apple version and some functionality gaps exist for succession planning and compensation, customers can still get plenty of mobile functionality without spending extra.
Administration and maintenance
A definite advantage that SuccessFactors offers is its administrative capabilities. Customers can maintain the entire system without requiring Basis or authorizations consultants, for example. Activities such as managing authorizations, user accounts and passwords, email notifications, adding new fields or objects, editing Picklists (the equivalent of SAP's F4 Help), or modifying the theme can be done by system administrators who can be trained through SuccessFactors free on-demand training videos in the Community website. In addition, because SuccessFactors hosts the software, there is little to no maintenance necessary from the customer-side. The only exception would be integrations.
For more on SAP HCM software:
Five things to think about when integrating SAP HCM, SuccessFactors
Read why one analyst thinks cloud HCM will be a key issue to watch in 2014
Look no further for a guide to all things SAP HCM
Whether customers go with a Hybrid model or a Full Cloud HCM model, there is always a need for a degree of integration. This could be between SuccessFactors and SAP ERP or with 3rd party vendors such as ADP or Kronos. Whatever the model, there are definitely challenges with varying object models, customizations, and long-term maintenance of integrations. Even when a customer has Full Cloud HCM and only SAP ERP, there will be significant cost and a level of complexity required to ensure that the systems talk to each other at the right time and with the right data in the right format. While SAP provides free standard integration content, the different integration platforms that SAP offers and the associated costs can be confusing to understand and potentially an expensive additional cost. When customers choose to use a non-SAP middleware such as MuleSoft ESB or IBM WebSphere Cast Iron, then they face the challenge of building and maintaining all of their integrations from scratch.
Licensing and ownership
For customers that want to go with the hybrid model, then there is a double whammy of on-premises maintenance and SuccessFactors subscriptions. In addition, some customers will find that the Operational Expense (Opex) model lacks the value that the Capital Expenditure (Capex) model offers through ownership of a fixed asset. Spending money on a subscription on a monthly basis seems wasteful for some organizations, while others see this as a better way to manage their finances when they don't possess the ability to make large-scale financial investments.
Moving to SuccessFactors is not for every business and some of the above points can be seen as either benefits or disadvantages, depending on your viewpoint. Additional factors to consider are the long-term costs and ROI, but such financial factors always depend on the discounts for each customer, and during this early adoption phase, companies can obtain some favorable discounts. It can be beneficial to seek professional expertise to support the evaluation and discovery required to understand if and how you should move to SuccessFactors cloud, although the factors here will help you judge if you want to look further into SuccessFactors.
About the author:
Luke Marson is a principal consultant and director of cloud HCM and related technologies at an IT consulting firm, where he focuses on SuccessFactors Employee Central and extensibility and integration technologies. He speaks and writes about SAP HCM and SuccessFactors extensively, and co-authored the SAP Press title SuccessFactors with SAP ERP HCM as well as authored the SAPexperts Special Report SAP and SuccessFactors – An Overview. Marson is also an SAP Mentor.
Dig Deeper on SAP HR management