We’re all living through an incredible time of change driven by the digitalization of business. It’s leading the shift from word of mouth to transparency with sharing sites like Glassdoor, TripAdvisor, WeChat, and Yelp. We’ve gone from traditional purchasing to subscriptions — just look at the rise of Apple Music, Netflix, and Hulu. We’re doing less scrapbooking and more “Instagramming,” and fewer people are working traditional bankers’ hours as we are movingtoward the gig economy. And of course, an ever-growing number of businesses are moving from asset-rich to asset-free, and are making money off of new business models.
The impacts are far reaching, and obviously point to the cloud — the source of innovation, speed, and user-centric experiences.
One of the places we see this play out is in human resources (HR). For too long, HR organizations have been overly consumed with completing day-to-day functional tasks such as payroll, performance, and onboarding. But this misses the point: Today theyare required to instead think strategically and develop a future-state HR where talent management processes align with the overall corporate agenda.
As the President of SAP SuccessFactors, my primary focus is to help clients transform HR into a more strategic line of business, and this same mandate applies to every line of business — and today’s technology is getting us there. The fact of the matter is that businesses need to go where the consumer is, and consumers today are very digital and they demand great experiences. So today’s business has to be digital. HR is responsible for meeting the expectations of your employees and enabling them to meet the expectations of your customers. This is what the cloud enables today so your business can run simple and run live. With 95 million subscribers to its cloud solutions, SAP is the fastest-growing cloud company at scale,1 and having surpassed 1,000 customers, SAP SuccessFactors Employee Central is one of the fastest-growing solutions for core HR customers in the cloud today.
Instant insight is now the commodity that businesses are using to completely reimagine their business. All lines of business — and HR is no exception — understand that they can drive transformation by changing the business mindset, with tools that allow them to turn away from process and toward strategy. Cloud brings a platform that enables innovation and sheds complexity, and this is one of the main reasons why organizations are turning to the cloud to drive digital transformation.
Cloud brings a platform that enables innovation and sheds complexity, and this is one of the main reasons why organizations are turning to the cloud to drive digital transformation.
Today’s CEO needs to focus on three simple concepts when transforming for a digital world:
- First, it’s about truly embracing that a digital strategy demands reimagining your business — everything from business models to business processes to how people work.
- Second is having the right technology that isdesigned for faster innovation and shorter business process cycle times — technology that is easy to use, that speeds collaboration and acts intelligently, and that allows you to maintain an IT landscape that is simple to run, manage, and expand.
- Lastly, it requires leaders who want to infuse the business with digital DNA, ensuring the right skills are in place across your organization to truly harness the value of the data you’re collecting and the ideas you’re generating. I think of it as mindset, technology, and talent.
By now, most companies have at least dipped their toes in the water when it comes to adopting cloud business applications. These applications often come in the back door, championed by the line of business anddelivered without the support of IT. Companies have thus experienced first-hand the unmatched agility, rapid time to deployment, and lower cost and complexity that stands in contrast to provisioning a new on-premisesystem. Many of our SAP SuccessFactors Employee Central customers, in fact, are transitioning their core HR processes from SAP ERP Human Capital Management (SAP ERP HCM) for this very reason.
Extensibility and Innovation
Other companies are moving to cloud applications for the aforementioned reasons, but are looking for flexibility when adopting the standardizations of off-the-shelf cloud applications. With SAP HANA Cloud Platform, these organizations are using SAP HANA as a platform-as-a-service to extend their applications.
While some SAP customers are extending their own applications, partners play an integral part in the building and development of a robust cloud environment. An example of this is JobPts, an innovative employee engagement and rewards tool developed not just for a specific customer, but available to all through SAP HANA Cloud Platform as a complement to the SAP SuccessFactors suite. A different type of example is the Accenture HR Audit and Compliance as-a-service tool that enhances SAP SuccessFactors Employee Central capabilities by automatically checking data against specified criteria and rules for functions, such as monitoring preset payroll rules and verifying SAP SuccessFactors Employee Central data that interfaces with a third-party payroll administrator. These innovations lead to faster delivery of value and greater adoption, which are hallmarks of the cloud. And they are important because, in our view, no one company will ever completely own innovation.
Shed Complexity in the Cloud
While these examples focus on HR, the key is that the cloud is the common denominator for organizations seeking to drive innovation. The complexity of the solutions from five or 10 years ago does not allow a line of business to transform and innovate as rapidly as today’s world demands. The cloud reduces that complexity.
SAP S/4HANA, our next-generation business suite, built natively on SAP HANA and with cloud and on-premise editions available, is the path to simplification and transformation across the entire enterprise. We re-architected and simplified the business suite for simple reasons: to help clients simplify business processes, save time and effort, and make the transformation from a narrow focus on operational processes to a robust, modern business running on a suite of applications that deliver live insights and data to help execute the strategic vision.
Systems that hamper rather than simplify work have no place in a real-time, digital enterprise. This is the reality today not only in HR but throughout the connected, networked enterprise. I’ve been fond of saying that the future of HR is no HR.2 At its essence, what this means is that HR will become unrecognizable from the traditional organization that contributed lots of process and complexity, but little strategic value to the business. The cloud is, and will continue to be, the way forward in supporting this transformation for HR as well as for all lines of business.
1 See http://go.sap.com/docs/download/investors/2016/sap-factsheet-feb2016-en.pdf. [back]
2 To learn more, see my article “The Future of HR Is No HR” from the October-December 2015 issue of SAPinsider. [back]