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How SuccessFactors Is Writing the Next Chapter in the Cloud HR Story

Q&A with Shawn Price, President, SuccessFactors, an SAP Company

insiderPROFILES, Volume-4, Issue 4

October 1, 2013

SAPinsider recently spoke with SuccessFactors President Shawn Price, who is responsible for the entire human capital management (HCM) portfolio at SAP, including both on-premise and cloud offerings. In this comprehensive Q&A, Price discusses what he views as a state-of-the-art HCM period, hot market trends, and why SuccessFactors is embracing the recruit-to-retire mentality.

 

Shawn Price joined SuccessFactors as President in October 2012, bringing with him more than two decades of software-as-a-service (SaaS) and cloud expertise. He has successfully led three initial public offerings (IPOs), and with a background in venture capital, Price combines a unique blend of Silicon Valley entrepreneurship with the ability to build companies that are global in scale. His successes additionally include guiding a former company to a $10 billion market capitalization. Prior to joining SuccessFactors, Price served as President of Zuora, Inc., one of the fastest-growing SaaS companies in the industry. He has also been CEO, President, and Chair of the Board at Savvion.

Price is responsible for the entire human capital management (HCM) portfolio at SAP, including both on-premise and cloud offerings. In January 2013, Price announced an ambitious goal: out of the top five companies in the history of computing, SuccessFactors wants to be the fastest company to go from half a billion dollars to a billion dollars in revenue. Just seven months later, he sat down with insiderPROFILES to confirm that SuccessFactors is on track to achieve this goal, and to discuss the company’s place in the HCM transformation occurring today.

Q: How is the game changing in the HCM space for SuccessFactors?

Over the next 24 months, we have the chance to define the HCM industry for the next decade. And this will be a growth industry for the next decade because the future of work has fundamentally changed. These types of opportunities come along very rarely, so it’s an incredibly exciting proposition.

What we do is valuable because we are helping companies not only find the best people, but engage and develop them. The game-changer in the industry is now looking at how those employees interact across the company over the span of their careers. So if you look at what’s happening today, the single largest asset for any company to execute against this strategy is not the technology: it is the people. What we are really talking about is state-of-the-art HCM, period, regardless of the delivery mechanism.

Essentially, the way people work has changed, which has forced companies to change. And I think we’ve had a hand in shaping how companies harness those changes and create a talent advantage. Systems of the past do not reflect the future, and that creates a fascinating landscape to play in. On a personal note, I’ve always looked for ways to really fulfill intellectual curiosity, and this is a chance to be a creator and an innovator as well as an executor. I’ve been given the opportunity to shepherd SAP into the cloud, which is a huge transition, and the message is clear from the top — we will lead with cloud. That’s a pretty thrilling opportunity in anyone’s career.

"I've always looked for ways to really fulfill intellectual curiosity, and this is a chance to be a creator and an innovator as well as an executor."

Q: What attracted you to join SuccessFactors a year ago?

I came to SuccessFactors because I believed strongly that our company is uniquely positioned in the market, and significant support and structure from SAP were going to accelerate our success and growth faster than we could do alone. That hasn’t changed. What also hasn’t changed is that the people who made the acquisition valuable remain, and that value hasn’t been diluted. Our culture, our DNA, and our bias toward innovation and speed to deploy hasn’t been subsumed. My leadership team and I put a vision in place for 2013 and the strategies required to deliver on that vision; we are continuing to execute against that, and we are growing the business.

Q: How is SuccessFactors responding to some of the market trends you’re seeing?

Recognizing the market was in transition over the past few years, we set out to build and acquire end-to-end applications to address the employee life cycle. This life cycle, from recruitment to retirement, consists of processes that historically haven’t been viewed as interconnected. The SuccessFactors portfolio embraces that entire life cycle. Companies are tired of processes that don’t align, having to bridge disparate apps with integrations, and interfaces that have no similarities. Most importantly, they’re tired of the inability to reach that endpoint of an employee’s life cycle because the best-of-breed applications don’t illustrate how to achieve that journey. They are demanding vendors who address these requirements; this is not about artificially creating market demand.

People are pushing up against all of these limitations to achieve co-existence and choice. It’s a fallacy that a global, multi-national company is going to rip and replace its entire ERP platform, let alone its human resources (HR) system without some premeditated migration. The complexities of globalization play beautifully to SAP’s strengths. SAP’s heritage and expertise in providing enterprise-class industryleading business applications benefited our focus on building out our core HR in the cloud — Employee Central. Pre-acquisition, we were recognized principally for talent management applications, but one of the first steps we took as an SAP company (SAP acquired SuccessFactors in December 2011) — and this is illustrative of the story of acquisition done right — was to leverage hundreds of engineers to create a next-generation core HR system in the cloud. These engineers brought decades of experience and knowledge of HR processes and delivery together with our depth and breadth of innovation in the cloud. And while we’ve seen the industry as a whole move to the cloud with regard to HCM applications, we’re still committed to ensuring our customers’ on-premise investments are supported even as we help them to add cloud applications to their landscapes.

Our customers are demanding a blueprint for their HR transformation that takes into account investments they have already made and the complexities involved in that transition. Some of them are straightforward; you can layer some talent applications to an on-premise instance. Others are addressing a fundamental change in the way companies operate.

But regardless of the journey, we are uniquely positioned today to present a single HCM voice to all our customers. With SuccessFactors, our customers have a trusted partner that recognizes the investments they have made to date, while offering a pathway toward transformation that helps remove these complexities.\ We hear from customers every day about what we’re doing right or wrong, and this feedback has helped drive our innovation and our roadmap.

Q: How does SuccessFactors differentiate itself from competitors?

The path we offer toward a people-first HR transformation is defined by “start anywhere — go everywhere” capabilities, backed by the power of a truly global ecosystem. In an emerging market, this isn’t solely about technology. We capture roughly 2,000 key performance indicators (KPIs) among our 30 million subscribers to deliver expertise and content surrounding employee life cycles, including the best-in category for retention and onboarding, for example. And we know the path that provides the greatest impact — for example, workforce planning and analytics allows you to assess your workforce needs, such as where you need people and who you need; and coupling that information with recruiting, onboarding, and learning management means that once you have the right people hired, you can quickly get them productive. And all of this is natively social and mobile because that’s what we all demand today. We’ve also partnered with leading time and attendance, payroll, and benefits vendors and built a joint go-to market with products that seamlessly integrate processes with our core HR in the cloud.

"Our customers are demanding a blueprint for their HR transformation that takes into account investments they have already made and the complexities involved in that transition."

This extended ecosystem offers unique advantages with an unmatched depth of pre-packaged integrations that are needed to fulfill all types of HR transactions. And, with SuccessFactors’ rich cloud background, we have been out front in recognizing that cloud delivery is shifting. Rather than five-year deployments costing millions, today’s delivery model is based instead on outcomes and go-lives. To account for this paradigm shift, we’ve switched our service delivery from 65% in house or direct to 65% indirect, and we have a commitment from our largest systems integrator of 2,000 certified consultants this year alone.

Q: Are you hearing any misconceptions about SuccessFactors?

When I describe interconnected processes and the concept of a recruit-to-retire employee life cycle, I’m not describing a transition that is going to occur — it’s a transition that is already occurring today. Another misconception is that we have to build out our core HR offering in the cloud, and that it is not yet ready for primetime. The truth is we have companies with more than 300,000 employees that are going live globally and betting their entire strategy on our core HR offering. And we expect to be the leader in that market before the end of this fiscal year in terms of number of subscribers and possibly number of customers. With approximately 22 million HCM cloud subscribers — 30 million in the cloud overall — we hear pretty quickly what customers like and don’t like, and so our rate of innovation is reflected in four times per year release cycles. What that means is what is here today isn’t representative of what will be here as soon as 90 days from now, allowing customers to invest beyond just the here and now.

Q: Why should potential customers jump on board with this recruit-to-retire concept?

Across any industry, the pace and speed of business today is dependent on talent. Trying to patch the solutions of the past to meet new requirements is not going to link a company’s strategy to its people. I am seeing that within the next 12-18 months, companies are going to explore and decide on a standardization platform for transformative HCM, and owning the core and the talent processes is required in order to remain relevant. That battle is now.

We see the market looking for guidance and expertise, and we recognize that this expertise isn’t the exclusive domain of SuccessFactors, which is why our strategy includes the extended partnerships I talked about. Companies are looking for an end-to-end vision, with a blueprint for how to get there that addresses the pace of adoption that is right for them, while preserving their current system investments. I believe we are unnaturally advantaged to help companies embrace the change taking place in the workforce and future-proof their business. We believe we are in a distinctive position to enable that, and this is an extremely exciting place to be.

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