At SAP’s 2019 SuccessConnect Las Vegas conference in Las Vegas, September 16-18, “experience” was the keyword. While SAP’s message at the event was heavily focused on the SAP Qualtrics Employee Engagement solution and the topic of employee experience, there was still plenty of content and chatter about other key solutions like Employee Central and Employee Central Payroll.
SAP SuccessConnect Says Goodbye ‘HCM,’ Hello ‘HXM’
Since announcing its acquisition of Qualtrics for $8 billion late last year, SAP has been moving rapidly to leverage the Qualtrics Employee Engagement solution to transform employee experience through the measurement and analysis of experience data (also called X-data). From the start of his opening keynote at SuccessConnect, SAP SuccessFactors president Greg Tomb made it very clear how important Qualtrics and the employee experience are to his company’s future roadmap.
Tomb unveiled a change in terminology that belies the importance of employee experience to SAP SuccessFactors’ customers and products. The term “human capital management” (HCM), Tomb said, was being replaced in SAP’s vernacular by “human experience management” (HXM).
The change – supported by an aggressive product roadmap and evolving solution set – signifies a shift away from the treatment of employees merely as an asset. “There has been a drumbeat from customers about ‘experience’ but recently the level of focus has intensified,” said Tomb during the media and analyst briefing at SuccessConnect. “Companies that focus on employee experience have 17% higher productivity and three times more revenue per employee,” he added.
In a recent SAPinsider survey of 278 individuals across 129 SAP customers, 59% of respondents who indicated they are achieving HR cloud technology results that are slightly better or significantly better than their peers said that they are driven most by the demand for visibility into HR processes and the need for greater employee engagement. The survey showed that this group is focused on strategies to increase employee engagement, satisfaction, and retention through consistent and engaging experiences. The investment by SAP in Qualtrics demonstrates that SAP is in lockstep with what business leaders say they are seeking from their cloud HR technology.
SAP also released the roadmap of future enhancements to its SAP Qualtrics solution set for HR that includes enhancements to how surveys are triggered. Currently, a change in employee data such as the end of an assignment or the start of a new employment status change can trigger a survey. According to the published roadmap, in 2020 real-time events like the completion of a training program or the completion of a candidate interview will be able to automatically trigger surveys, too.
As Adessa Group’s Sven Ringling recently pointed out, the changes promised in the roadmap appear more centered around triggers and less around the integration of X (experience) and O (operational) data. This will still leave some questions for customers on how to address integration until SAP provides standard integrations in a future update. In the meantime, the changes highlighted in the current roadmap will allow HR organizations to more seamlessly capture the X-data that is critical to the success of employee engagement analysis. Future SAPinsider articles and blogs will explore the SAP Qualtrics roadmap in greater detail.
Employee Central and Employee Central Payroll Adoption Continues to Grow
While there was plenty of buzz around Qualtrics at the conference, there was also some important content shared around both Employee Central and Employee Central Payroll. Employee Central adoption numbers continue to increase, up from 3,200 customers in the first quarter of this year to 3,400 in the current quarter. Employee Central Payroll has also seen impressive growth, with a 93% increase in customers year-over-year from June 2018 to June 2019.
So, why are we seeing these increases? There may be many reasons, but as we approach the stated 2025 end-of-support date customers are taking transformation more seriously and looking to move away from on-premise faster. Others are realizing that in order to leverage many of the new technologies and advancements across HR in support of their current strategies, an update is needed to core HR and payroll.
SAPinsider will be focusing upcoming research reports on both the adoption trends of Employee Central and the role payroll plays in the HR technology decision making process.
What Does This Mean for SAPinsiders?
SAPinsider’s research shows that HR organizations are continuing to balance the pressures of their traditional role as a cost center with the need to aggressively hire and retain top-notch talent. It’s easy to get lost in the marketing messages at a conference like SuccessConnect, but HR organizations need to continue to focus on the processes and technologies that enable them to gain the most value from their investments. Based on the content and insights showcased at SuccessConnect, customers should:
- Focus on your core HR technology. At the end of the day a customer’s ability to gain value from any of those new applications will be driven by their adoption and smart use of core HR applications like Employee Central. This should be a priority for customers that wish to take advantage of the advances in user experience, process integration, and even localization/compliance that come with Employee Central, particularly for those still operating with on-premise technology.
- Bring payroll to the forefront of the cloud HR decision making. Between the growth of Employee Central Payroll and the availability of solutions like Synchrony Payroll, EPI-USE’s PRISM migration service, and iXerv’s PUNCH, payroll should no longer be viewed as an obstacle to moving HR systems to the cloud. Partner solutions such as these can provide a clear migration path or offer localized payroll solutions for customers whose geography or employee count might have previously prevented them from adopting Employee Central Payroll or simply integrating smaller payrolls with Employee Central. The effort to move or transform payroll remains a large one, but the barrier is no longer due to a lack of options.
- Keep an eye on the growth of artificial intelligence in HR. At SuccessConnect, it was very clear that technologies such as artificial intelligence (AI) are not just future roadmap items for HR – they are already here. Partners such as Eightfold, Censia, and Skillsoft have developed applications and platforms that leverage AI, machine learning, and predictive analytics to make HR, recruiting, learning, and talent processes more efficient. HR leaders need to stay abreast of the rapid changes in this technology to understand how to derive the most value from it.
An understanding of the latest trends and content for SAP SuccessFactors should help SAP customers properly plan for and maximize the results of their cloud HR initiatives. For additional insights on the overall cloud HR adoption trends and developments, download the recent SAPinsider benchmark report titled “State of the Market: How the Cloud is Transforming HR”.